Public Accounts
2003-04

Volume 1

Main Financial Statements


Public Accounts, 2003-04		1


Table of Contents
	Page
Transmittal Letters	3

Introduction to the Public Accounts	4

Sources of Additional Information	4

Financial Reporting Structure	5

General Revenue Fund Financial Statements
Responsibility for General Revenue Fund Financial Statements	9
Provincial Auditor's Report	11
Statement of Financial Assets, Liabilities, and Accumulated Deficit	13
Statement of Revenue, Expenditure, and Accumulated Deficit	14
Statement of Cash Flow	15
Notes to the Financial Statements	16
Schedules to the Financial Statements
Schedule 1 - Accounts Receivable	24
Schedule 2 - Loans to Crown Corporations	24
Schedule 3 - Other Loans	25
Schedule 4 - Accounts Payable and Accrued Liabilities	26
Schedule 5 - Deposits Held	26
Schedule 6 - Debt	27
Schedule 7 - Sinking Funds	28
Schedule 8 - Debt by Maturity	29
Schedule 9 - Guaranteed Debt	30
Schedule 10 - Revenue	32
Schedule 11 - Loss on Loans and Investments	33
Schedule 12 - Net Change in Non-cash Operating Activities	33
Schedule 13 - Investing Activities	34

Fiscal Stabilization Fund
Schedule of Transfers and Accumulated Balance	37

Summary Financial Statements
Responsibility for Summary Financial Statements	41
Provincial Auditor's Report	43
Summary Statement of Financial Assets, Liabilities, and Accumulated Deficit	45
Summary Statement of Revenue, Expenditure, and Accumulated Deficit	46
Summary Statement of Cash Flow	47
Notes to the Summary Financial Statements	48
Schedules to the Summary Financial Statements
Schedule 1 - Accounts Receivable	58
Schedule 2 - Loans and Mortgages Receivable	58
Schedule 3 - Investment in Government Business Enterprises	60
Schedule 4 - Other Investments	63
Schedule 5 - Accounts Payable and Accrued Liabilities	67
Schedule 6 - Other Liabilities	67
Schedule 7 - Unearned Revenue	67
Schedule 8 - Public Debt	68
Schedule 9 - Sinking Funds	69
Schedule 10 - Public Debt by Maturity	70
Schedule 11 - Guaranteed Debt	72
Schedule 12 - Revenue	74
Schedule 13 - Gains and Losses on Other Investments	75
Schedule 14 - Net Change in Non-cash Operating Activities	75
Schedule 15 - Reporting Entity	76

General Revenue Fund - Details of Debentures	78

Glossary of Terms	87

This page left blank intentionally.


Public Accounts, 2003-04		3

To Her Honour
The Honourable Lynda Haverstock
Lieutenant Governor of the Province of Saskatchewan

May It Please Your Honour:

The undersigned has the honour to submit herewith the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2004.

Respectfully submitted,

/s/ Harry Van Mulligan
Harry Van Mulligen
Minister of Finance

Regina, Saskatchewan
June 2004

The Honourable Harry Van Mulligen
Minister of Finance

We have the honour of presenting herewith the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2004.

Respectfully submitted,


/s/ Ron Styles Ron Styles Deputy Minister of Finance Regina, Saskatchewan June 2004	/s/ Terry Paton Terry Paton Provincial Comptroller


4		Public Accounts, 2003-04

Introduction to the Public Accounts

The 2003-04 Public Accounts of the Government of Saskatchewan are organized into two reports:

Volume 1 contains the General Revenue Fund Financial Statements and the Summary Financial Statements. These are the main financial statements of the Government of Saskatchewan. It also contains information on the Fiscal Stabilization Fund.

The General Revenue Fund Financial Statements account for the financial transactions of the General Revenue Fund and the Province of Saskatchewan Sinking Funds. All public money is paid into the General Revenue Fund except where the Legislative Assembly has directed otherwise. The General Revenue Fund is available for appropriation for the public services of Saskatchewan.

The Summary Financial Statements consolidate the financial transactions of the General Revenue Fund, Crown corporations, agencies, boards and commissions. These consolidated statements provide a full accounting of the financial affairs and resources of all entities for which the Government is responsible.

The Fiscal Stabilization Fund was established April 1, 2000. Its purpose is to stabilize the fiscal position of the Government from year to year and to facilitate the accomplishment of long term objectives.

Volume 1 also contains detailed information on public issue debentures and debentures issued to the Minister of Finance of Canada.

Volume 2 contains the following:

details on the revenue and expenditure of the General Revenue Fund; and
other information including financial information on the assets, liabilities and residual balances of pension plans and trust funds administered by the Government, and a listing of remissions of taxes and fees.

Internet Address

The Public Accounts are available on the Internet at: http://www.gov.sk.ca/finance/paccts

Sources of Additional Information

Financial Statements Compendium

The financial statements of various government boards, agencies, commissions, pension plans, special purpose funds and institutions, as well as Crown corporations which are accountable to the Treasury Board are available on the internet at: http//www.gov.sk.ca/finance/paccts

Annual Reports of Saskatchewan Crown Corporations

This is a compendium of the financial reports of Crown corporations that are accountable to the Crown Investments Corporation.

Budget Address

The Government of Saskatchewan presents a budget each year, usually early in the spring. At this time, a document containing the Budget Address and budget papers is tabled.

Saskatchewan Estimates

The Government’s spending estimates for the year commencing April 1 are presented to the members of the Legislative Assembly following presentation of the Budget Address by the Minister of Finance. The Estimates outline the detailed estimates of revenue, expenditure, loans, advances, and investments to the Legislative Assembly for approval in the form of The Appropriation Act.

Province of Saskatchewan Interim Financial Reports

Updates on the General Revenue Fund’s revenue, expenditure, surplus, and debt also provided in financial reports prepared after the first quarter, at mid-year and after the third quarter.


Public Accounts, 2003-04		5

This page left blank intentionally.

General Revenue Fund
Financial Statements

This page left blank intentionally.


General Revenue Fund		9

Responsibility for General Revenue Fund Financial Statements

The Government is responsible for the General Revenue Fund Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to get reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements following the Government’s stated accounting policies and using the Government’s best estimates and judgement when appropriate.

The Provincial Auditor expresses an independent opinion on these statements. His report, stating the scope of his audit and opinion, appears on the following page.

Treasury Board approves the General Revenue Fund Financial Statements. The Minister of Finance tables the statements in the Legislative Assembly as part of the Public Accounts. The Legislative Assembly refers the Public Accounts to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Harry Van Mulligen
Harry Van Mulligen
Minister of Finance

/s/ Ron Styles
Ron Styles
Deputy Minister of Finance

/s/ Terry Paton
Terry Paton
Provincial Comptroller

Regina, Saskatchewan
June 2004

This page left blank intentionally.


General Revenue Fund		11

Auditor’s Report

To the Members of the Legislative Assembly
of Saskatchewan

These financial statements report transactions and events of the General Revenue Fund only. Significant financial activities of the Government occur outside this Fund. Therefore, readers should not use the General Revenue Fund’s financial statements to understand and assess the Government’s management of public financial affairs and resources as a whole.

Volume 1 of the Public Accounts includes a more complete set of financial statements. Those statements are called the Summary Financial Statements of the Government of Saskatchewan. Their purpose is to report the full nature and extent of the financial affairs and resources for which the Government is responsible. Please refer to those summary statements to understand and assess the Government’s management of public financial affairs and resources as a whole.

I have audited the statement of financial assets, liabilities, and accumulated deficit of the General Revenue Fund as at March 31, 2004 and the statements of revenue, expenditure, and accumulated deficit and cash flow for the year then ended. These financial statements are the responsibility of Treasury Board. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

Reservations

The Government records transactions between the General Revenue Fund and the Fiscal Stabilization Fund as revenues or expenditures of the General Revenue Fund. The substance of the transactions between the General Revenue Fund and the Fiscal Stabilization Fund are that amounts owed by the General Revenue Fund to the Fiscal Stabilization Fund must be repaid to the General Revenue Fund by the Fiscal Stabilization Fund. Canadian generally accepted accounting principles for the public sector do not allow the General Revenue Fund to record changes in the amounts due to the Fiscal Stabilization Fund as revenues or expenditures of the General Revenue Fund.

In 2004, the financial statements show a liability of $366 million owed to the Fiscal Stabilization Fund and revenue of $211 million from the Fiscal Stabilization Fund. It is not appropriate to record the $211 million as revenue because it is not revenue earned by the General Revenue Fund but is the reduction in the amount owed to the Fiscal Stabilization Fund by the General Revenue Fund. In my opinion, instead of recording revenue of $211 million, the financial statements should show an asset of $366 million owed to the General Revenue Fund from the Fiscal Stabilization Fund. Had the transaction been properly recorded, financial assets as at March 31, 2004, would increase by $366 million and the accumulated deficit would decrease by $366 million. Also, revenue from the Fiscal Stabilization Fund would decrease by $211 million and the surplus for the year would decrease by $211 million.

In 2003, the financial statements show a liability of $577 million owed to the Fiscal Stabilization Fund and an expenditure of $82 million to the Fiscal Stabilization Fund. It is not appropriate to record the $82 million as an expenditure because the Fiscal Stabilization Fund must return the $82 million to the General Revenue Fund. In my opinion, instead of recording an expenditure of $82 million, the financial statements should record an asset of $577 million owed to the General Revenue Fund from the Fiscal Stabilization Fund. Had the transaction been properly recorded, financial assets as at March 31, 2003, would increase by $577 million and the accumulated deficit would decrease by $577 million. Also, expenditure would decrease by $82 million and the surplus for the year would increase by $82 million.

Loans receivable from Crown corporations include $32 million (2003 — $58 million) that can only be repaid if the Government provides the Crown corporations with the money to repay the loans. Canadian generally accepted accounting principles for the public sector require that such transactions be recorded as expenditures and not as loans receivable. Had the transactions been properly recorded, loans receivable from Crown corporations as at March 31, 2004, would decrease by $32 million (2003 — $58 million) and the accumulated deficit would increase by $32 million (2003 — $58 million). Also, expenditure would increase by $12 million (2003 — $58 million) and the surplus for the year would decrease by $12 million (2003 — $58 million).


12		Public Accounts, 2003-04

The General Revenue Fund is responsible for the liabilities of several pension plans. Note 7 states that the pension liabilities are not recorded in these financial statements. Canadian generally accepted accounting principles for the public sector require that the pension liabilities should be recorded in the financial statements. Had pension liabilities been recorded, liabilities and accumulated deficit as at March 31, 2004, would increase by $4,023 million (2003 — $3,976 million) and expenditure would increase by $47 million (2003 — $24 million) and surplus for the year would decrease by $47 million (2003 — $24 million).

Opinion

In my opinion, except for the effects of recording changes in the amounts due to the Fiscal Stabilization Fund as revenues or expenditures of the General Revenue Fund, the recording of loans receivable instead of expenditures when the Government has to provide the money to repay the loans receivable, and the failure to record pension liabilities as described in the preceding paragraphs, these financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles for the public sector.


Regina, Saskatchewan June 9, 2004		/s/ Fred Wendel Fred Wendel, CMA, CA Provincial Auditor


General Revenue Fund		13

General Revenue Fund
Statement of Financial Assets, Liabilities, and Accumulated Deficit

As at March 31, 2004


Schedule				2004					2003
Financial Assets
Cash and temporary investments (note 3)				$	501,675				$	353,002
Prepaid expenditures					2,221					3,257
1 Accounts receivable					575,364					531,274
Agricultural land held for resale (note 4)					108,086					109,960
Deferred charges					50,014					48,447
2 Loans to Crown corporations					3,612,227					3,626,777
3 Other loans					121,478					121,632
Equity investment in Crown Investments
Corporation of Saskatchewan					1,181,152					1,181,152
Total Financial Assets					6,152,217					5,975,501

Liabilities
4 Accounts payable and accrued liabilities					983,792					833,325
5 Deposits held					570,798					779,984
Unearned revenue					57,798					59,579
6,7&8 Debt	$	11,643,864					11,448,203
Unamortized foreign exchange loss		(50,030	)		11,593,834		(136,689	)		11,311,514
Total Liabilities					13,206,222					12,984,402
Accumulated Deficit				$	(7,054,005	)			$	(7,008,901	)

(See accompanying notes)

      Tangible capital assets (note 5)
      Pension liabilities, contingencies, and commitments (notes 7, 11, 12)
9    Guaranteed debt


14		Public Accounts, 2003-04

General Revenue Fund
Statement of Revenue, Expenditure, and Accumulated Deficit

For the Year Ended March 31, 2004

				(thousands of dollars)
Schedule	Budget 2004			Actual 2004			Actual 2003
Revenue
10 Taxation	$	3,422,100		$	3,397,696		$	3,368,100
10 Non-renewable resources		816,800			1,140,962			1,243,649
10 Transfers from Government entities		600,200			614,250			692,491
10 Other own-source revenue		334,200			372,538			351,645
10 Transfers from the federal government		1,054,700			1,032,952			800,820
Total Revenue		6,228,000			6,558,398			6,456,705
Operating Expenditure
Executive Branch of Government
Agriculture, Food and Rural Revitalization		251,818			332,388			311,970
Centenary Fund		29,000			27,843			24,451
Community Resources and Employment		605,963			605,027			607,099
Corrections and Public Safety		118,550			117,596			116,369
Culture, Youth and Recreation		43,698			47,668			43,472
Environment		139,743			178,335			180,324
Executive Council		7,409			7,119			7,071
Finance		239,663			235,598			222,470
Government Relations and Aboriginal Affairs		190,346			187,003			176,006
Health		2,526,794			2,515,823			2,342,835
Highways and Transportation		296,192			293,732			294,492
Industry and Resources		77,541			71,514			91,561
Information Technology Office		5,365			3,089			--
Justice		190,947			194,659			184,284
Labour		14,246			13,779			13,771
Learning		1,165,416			1,256,112			1,085,613
Northern Affairs		5,519			4,883			--
Public Service Commission		8,554			8,515			8,554
Saskatchewan Property Management Corporation		17,608			22,108			21,833
Saskatchewan Research Council		7,964			7,964			--
Saskatchewan Water Corporation		--			--			3,016
Legislative Branch of Government
Chief Electoral Officer		811			7,779			1,207
Conflict of Interest Commissioner		122			102			99
Information and Privacy Commissioner		306			290			121
Legislative Assembly		18,465			18,295			17,455
Ombudsman and Children's Advocate		2,771			2,737			2,651
Provincial Auditor		5,755			5,755			5,727
Total Operating Expenditure (note 10)		5,970,566			6,165,713			5,762,451
Operating Surplus		257,434			392,685			694,254
Finance - Servicing the Debt (note 9)		(650,000	)		(602,702	)		(611,394	)
Transfer from (to) the Fiscal Stabilization Fund		392,700			211,000			(82,000	)
Surplus for the Year		134			983			860
Accumulated deficit, beginning of year		(7,008,901	)		(7,008,901	)		(7,009,761	)
Adjustment to accumulated deficit (note 17)		--			(46,087	)		--
Accumulated Deficit, End of Year (note 8)	$	(7,008,767	)	$	(7,054,005	)	$	(7,008,901	)

(See accompanying notes)


General Revenue Fund		15

General Revenue Fund
Statement of Cash Flow

For the Year Ended March 31, 2004

	(thousands of dollars)
Schedule	2004			2003
Operating Activities
Surplus for the year	$	983		$	860
Add non-cash items
Amortization of foreign exchange loss		3,660			9,771
11 Loss on loans and investments		79,785			2,262
12` Net change in non-cash operating activities		104,065			114,141
Earnings retained in sinking funds		(46,868	)		(50,827	)
Adjustment to accumulated deficit		(46,087	)		--
Cash Provided by Operating Activities		95,538			76,207
Investing Activities
13 Loan Advances		(499,635	)		(429,518	)
13 Loan Repayments		306,969			416,911
13 Sinking fund contributions received from Crown corporations		24,608			24,459
13 Contributions made to sinking funds		(83,424	)		(81,925	)
13 Debt redemption funded from sinking funds		30,234			--
13 Other		1,628			62,551
Cash Used for Investing Activities		(219,620	)		(7,522	)
Financing Activities
Proceeds from debt		1,124,423			843,782
Repayment of debt		(642,482	)		(404,651	)
Decrease in deposits held		(209,186	)		(285,008	)
Cash Provided by Financing Activities		272,755			154,123
Increase in Cash and Temporary Investments		148,673			222,808
Cash and temporary investments, beginning of year		353,002			130,194
Cash and Temporary Investments, End of Year	$	501,675		$	353,002

(See accompanying notes)


16		Public Accounts, 2003-04

General Revenue Fund
Notes to the Financial Statements

As at March 31, 2004

1. Significant Accounting Policies

These financial statements are prepared in accordance with the generally accepted accounting principles for senior governments as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants, with the following exceptions:

transfers to and from the Fiscal Stabilization Fund are included in the determination of surplus for the year; and
pension liabilities are not recorded in the financial statements. The General Revenue Fund accounts for defined benefit pension obligations on a cash basis.

The significant accounting policies are summarized below.

a) Reporting entity

The General Revenue Fund is the general fund which receives all revenues unless otherwise specified by law. Spending from the General Revenue Fund is appropriated by the Legislative Assembly.

Other government entities such as special purpose funds, Crown corporations, and other agencies, report separately in other financial statements. Only financial transactions to or from these other entities are included in the General Revenue Fund. The net expenditures/recoveries for revolving funds’ operations are charged to expenditure.

The Government’s summary financial statements which include the financial activities of the General Revenue Fund and other government entities are provided separately.

b) Basis of accounting

The accrual basis of accounting is used and specifically expressed as follows:

Revenue

Except for corporate and personal income taxes which are recorded when received from the federal government, revenues are recorded on the accrual basis.

Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met.

Expenditure

Expenditures are recorded on the accrual basis, except for defined benefit pension plan costs which are recorded on the cash basis, and include the cost of tangible capital assets and inventories acquired during the year.

Government transfers are recognized as expenditures in the period during which the transfer is authorized and any eligibility criteria are met.

Assets

Financial assets are those assets on hand at the end of an accounting period which could provide resources to discharge existing liabilities or finance future operations.

Temporary investments are recorded at the lower of cost or market.

Agricultural land held for resale is valued at the lower of cost or net realizable value, on an aggregate basis.

Deferred charges include issue costs and net discounts or premiums incurred on the issue of long-term debt. They are recorded at cost and amortized on a straight line basis over the remaining life of the debt issue.

Loans to Crown corporations and Other loans generally have fixed repayment terms and are interest bearing. Short-term loans to Crown corporations are recorded at par; all other loans are recorded at cost. Interest received on these loans is netted against interest paid on money borrowed for these loans

Equity investment in Crown Investments Corporation of Saskatchewan is an advance to the corporation to form its equity capitalization and is recorded at cost.


General Revenue Fund		17

General Revenue Fund
Notes to the Financial Statements

Where there has been a loss in value that is other than a temporary decline, loans and equity investments are written down to recognize the loss.

Tangible capital assets and inventories, except for agricultural land held for resale, are recorded as an expenditure in the period acquired.

Liabilities

Liabilities include obligations to outside organizations and individuals as a result of transactions and events occurring prior to year end. They consist of financial obligations to repay borrowings and to pay for goods and services acquired prior to year end, and revenue, where goods or services will be delivered in the future.

Unearned revenue consists mainly of revenue for Crown mineral leases and motor vehicle fees that will be earned in a subsequent fiscal year.

Debt is issued for general government purposes and for Crown corporations. All debt is recorded at par.

Premiums, discounts, and issue costs incurred on debt issued for general government purposes are recorded as deferred charges and amortized on a straight line basis over the remaining life of the debt issue.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. The General Revenue Fund is reimbursed by Crown corporations for all sinking fund contributions made on debt incurred on their behalf. Premiums and discounts on long-term investments within the sinking fund are amortized by the type of security on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Interest, discounts, premiums and commissions on money borrowed for Crown corporations and others are netted against reimbursements by these entities.

Unamortized foreign exchange loss includes unrealized foreign exchange gains and losses resulting from conversion of debt and sinking fund investments, held for general government purposes in a foreign currency, to the Canadian dollar equivalent at March 31. Unrealized foreign exchange gains and losses are amortized on a straight line basis over the remaining life of the debt issue. Realized foreign exchange gains or losses, resulting from transactions for general government purposes, are included in servicing the debt.

Guaranteed debt includes guarantees by the Minister of Finance, made through specific agreements or legislation, to repay promissory notes, bank loans, lines of credit, mortgages and other securities. Loss provisions on guaranteed debt are recorded when it is likely that a loss will occur. The amount of the loss provision represents the best estimate of future payments less recoveries. The loss provision is recorded as a liability and an expenditure in the year determined and is adjusted as necessary to ensure it equals the expected payout of the guarantee.

2. Measurement Uncertainty

Uncertainty in the determination of the amount at which an item is recognized in financial statements is known as measurement uncertainty. Such uncertainty exists when there is a variance between the recognized amount and another reasonably possible amount.

Measurement uncertainty exists in these financial statements in the accrual of non-renewable resource royalties, and the federal government’s Equalization and the Canada Health and Social Transfer. The uncertainty arises from factors such as price and production sensitivities in the royalty structures, and the effect on transfers from the federal government of changes in economic and demographic conditions in the Province and the country. Management considers that it is reasonably possible that changes in future conditions in the near term could require a material change in the amounts recognized. Near term is defined as a period of time not to exceed one year from the date of the financial statements.

3. Cash and Temporary Investments

The market value of cash and temporary investments is $501.8 million (2003 — $353.1 million). Temporary investments are generally for less than 30 days, and have an average effective interest rate of 2.25 per cent.

4. Agricultural Land Held For Resale

The estimated net realizable value of the agricultural land held for resale at March 31, 2004 is $205.2 million (2003 — $202.3 million).


18		Public Accounts, 2003-04

General Revenue Fund
Notes to the Financial Statements

5. Tangible Capital Assets

Tangible capital assets are recorded as an expenditure in the year acquired and are not included in the Statement of Financial Assets, Liabilities, and Accumulated Deficit. These assets are a key component in the delivery of government programs and provide on-going value to the public.

Tangible capital assets are valued at cost and are generally amortized on a straight line basis over the estimated useful life of each asset.

During the current year, tangible capital assets costing $199.8 million (2003 — $147.0 million) were acquired.

The following table includes assets held for use and does not include assets acquired by right or heritage assets and certain assets available for public use.

The Saskatchewan Property Management Corporation (SPMC) also acquires tangible capital assets for use in day to day operations. SPMC manages most of the buildings and land used in the provision of services to the public. These assets are reported separately in the financial statements of SPMC.

												(thousands of dollars)
	2004														2003
	Land & Buildings		Machinery & Equipment		Transportation Equipment		Office & Information Technology		Infrastructure			Total			Total (Restated¹)
Estimated useful life	15 years - Indefinite		10-20 years		10-40 years		5-10 years		15-40 years
Opening cost	$	85,901	$	7,089	$	11,212	$	54,874	$	2,558,819		$	2,717,895		$	2,611,860
Additions²		6,830		52,897		1,064		8,479		130,556			199,826			147,030
Disposals		--		--		--		--		(41,319	)		(41,319	)		(40,995	)
Closing cost³		92,731		59,986		12,276		63,353		2,648,056			2,876,402			2,717,895
Opening accumulated
amortization		3,239		3,607		3,891		18,449		1,265,044			1,294,230			1,247,438
Annual amortization		2,163		694		634		6,788		82,757			93,036			87,778
Disposals		--		--		--		--		(41,257	)		(41,257	)		(40,986	)
Closing accumulated
amortization		5,402		4,301		4,525		25,237		1,306,544			1,346,009			1,294,230
Net Book Value of
Tangible Capital Assets	$	87,329	$	55,685	$	7,751	$	38,116	$	1,341,512		$	1,530,393		$	1,423,665

During the year, the thresholds for tangible capital assets other then infrastructure were increased and estimated useful lives were revised for certain asset categories. These changes were implemented retroactively. Increases to the April 1, 2003 opening cost of $9.0 million and opening accumulated amortization of $6.1 million reflect these changes and the initial disclosure of certain assets.

²	Additions include $54.2 million of tangible capital assets transferred from revolving funds on March 31, 2004.

³	Closing cost includes work-in-progress of $8.4 million (2003 — $20.2 million).

6. Risk Management of Public Debt

Funds are borrowed in both domestic and foreign capital markets by issuing Province of Saskatchewan securities. This borrowing activity finances general government operations and the activities of Crown corporations. These transactions result in exposure to four types of risk — interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, a preference for fixed rate Canadian dollar denominated debt is maintained. Where market conditions dictate that other forms of debt are more attractive, opportunities are identified to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract whose value is based on the value of another asset or index.

Interest rate risk is the risk that debt servicing costs will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest. Opportunities are sought to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. At March 31, 2004, 82.0% (2003 — 86.6%) of the gross debt effectively carried a fixed rate of interest.


General Revenue Fund		19

General Revenue Fund
Notes to the Financial Statements

Foreign exchange rate risk is the risk that debt servicing costs will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, opportunities are sought to effectively convert it into Canadian dollar debt through the use of a cross currency swap. At March 31, 2004, 86.3% (2003 — 81.6%) of the gross debt was effectively denominated in Canadian dollars.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties with good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2004, 100% (2003 — 100%) of counterparties held a credit rating of A or higher, as defined by Standard and Poor’s.

Liquidity risk is a risk that financial commitments will not be met over the short-term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

Schedule 8 provides more detailed information regarding the use of derivative instruments.

7. Retirement Benefits

The Government sponsors several defined benefit pension plans and a defined contribution pension plan.

Pension fund assets of government sponsored defined benefit and defined contribution pension plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

Defined benefit pension plans

Defined benefit plans provide benefits based on length of service and pensionable earnings. A typical defined benefit plan provides pensions equal to 2 per cent of a member’s average five years highest salary, multiplied by the years of service to a maximum of 35 years. Members contribute a percentage of salary, which may vary based on age, to their plan. Pensions and contribution rates are integrated with the Canada Pension Plan.

The two main plans are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan, Anti-TB League Employees Superannuation Plan and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation. Obligations for allowances payable from the former Members of the Legislative Assembly Superannuation Fund (MLA) are part of the General Revenue Fund.

Actuarial valuations are performed at least triennially. These valuations are extrapolated by an actuary when a valuation is not done in the current fiscal year. Valuations are based on a number of assumptions about future events, such as inflation rates, interest rates, wage and salary increases and employee turnover and mortality. These assumptions reflect estimates of expected long-term rates and short-term forecasts. Estimates vary based on the individual plan.

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension fund assets are valued at market related values based on actual market values averaged over a four year period. In the periods between valuations, the actuary estimates the market related value of pension fund assets using expected long-term rates of return for the individual plans.

The TSP provides inflation protection equal to 80 per cent of the annual increase in the Consumer Price Index. Other plans provide inflation indexing at the discretion of the Lieutenant Governor in Council.

The Government is required to match member current service contributions for all plans except Judges and the PSSP. Separate pension funds are maintained for all plans except the PSSP and MLA. PSSP member contributions are deposited into the General Revenue Fund. All pension obligations arising under the PSSP and MLA are paid from the General Revenue Fund.


20		Public Accounts, 2003-04

General Revenue Fund
Notes to the Financial Statements

Information on the defined benefit plans follows:

	2004										2003
	TSP		PSSP			Others			Total		Total
Plan Status		closed		closed			closed	¹		closed		n/a
Member contribution rate, percentage of salary		7.85		7-9	²		5-9	²		n/a		n/a
Number of active members		4,424		1,755			73			6,252		7,268
Average age of active members, years		51.9		53			59			52		51.1
Former members entitled to deferred pension benefits		5,867		136			10			6,013		6,817
Number of superannuates and surviving spouses		10,008		5,782			2,197			17,987		17,489
Member contributions (thousands of dollars)	$	18,481	$	6,063		$	335		$	24,879	$	27,655
Government contributions (thousands of dollars)		73,188		--			2,550			75,738		69,349
Benefits paid (thousands of dollars)		249,364		98,318			6,954			354,636		335,770

¹	Judges is open to new membership, all other plans are closed.

²	Contribution rate varies based on age upon joining the plan.

n/a — not applicable

The assumptions used to determine the actuarial value of the accrued benefit obligation and pension fund assets for TSP and PSSP are as follows:


Rate of compensation increase	3.50	%	4.00	%
Expected long-term rate of return on plan assets	7.00	%	n/a
Discount rate	7.00	%	6.25	%
Inflation rate	3.00	%	3.00	%

Based on the latest actuarial valuation, extrapolated to March 31, 2004, the present value of accrued pension benefits and the market related value of pension fund assets are shown in the table below:

											(thousands of dollars)
	2004												2003
Plan Name	Actuarial Valuation Date	Accrued Benefit Obligation		Pension Fund Assets		Net Obligation		Unamortized Estimation Adjustments¹			Pension Libailities		Pension Liabilities
TSP²	Jun. 30/03	$	4,137,353	$	1,623,832	$	2,513,521	$	(23,613	)	$	2,489,908	$	2,500,874
PSSP	Dec. 31/02		1,578,853		--		1,578,853		(129,103	)		1,449,750		1,394,593
Others	Various		244,589		157,483		87,106		(3,608	)		83,498		80,698
		$	5,960,795	$	1,781,315	$	4,179,480	$	(156,324	)	$	4,023,156	$	3,976,165

¹	Amortized against the net obligation over 4 to 13 years, which is the estimated average remaining service life of active plan members at the time the estimation adjustment arises. The net estimation adjustment loss during the year totalled $353.0 million.

²	The TSP accrued benefit obligation includes a liability of $43.0 million (2003 — $77.8 million) relating to the TSP disability provision.

At March 31, 2004, the market value of plan investments was $1.8 billion (2003 — $1.6 billion). Of this amount, 39.6 per cent (2003 — 43.5 per cent), was invested in fixed income securities and 53.7 per cent (2003 — 46.4 per cent) in equity investments.

The TSP’s actual rate of return on plan assets was 21.3 per cent (2003 — (9.0) per cent).

Defined contribution plans

Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary.

The Government sponsors the Public Employees Pension Plan (PEPP), a multi-employer defined contribution plan. Employers are required to provide contributions at specific rates for employee current service. The General Revenue Fund has fully funded its share. The General Revenue Fund also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation.


General Revenue Fund		21

General Revenue Fund
Notes to the Financial Statements

Information on the defined contribution plans to which the General Revenue Fund contributes follows:

	2004							2003
	PEPP			STRP		Total		Total
Plan Status		open			n/a		n/a		n/a
Member contribution rate, percentage of salary		5-6.35	¹		n/a		n/a		n/a
Employer contribution rate, percentage of salary		6.35			n/a		n/a		n/a
Number of active members, all employers		29,324			n/a		29,324		29,215
General Revenue Fund participation:
Number of active members		14,554			n/a		14,554		14,510
Number of incative members		7,758			n/a		7,758		7,303
Member contributions (thousands of dollars)	$	31,137			n/a	$	31,137	$	29,701
Government contributions (thousands of dollars)		31,873		$	30,729		62,602		58,087

¹	Contribution rate varies based on employee group.

Pension expenditure

Pensions are accounted for on a cash basis. The pension liabilities are not recorded in the financial statements.

	(thousands of dollars)
	2004		2003
Defined benefit plans	$	170,343	$	157,163
Defined contribution plans		62,602		58,087
	$	232,945	$	215,250

8. Reserves

The accumulated deficit of $7,054.0 million consists of an unallocated deficit component of $7,065.9 million and the Environmental Protection Reserve of $11.9 million. The Environmental Protection Reserve was created to provide contingency funding to mitigate unforeseen environmental problems related to uranium milling. The reserve is maintained at its March 31, 1992 balance.

9. Debt Servicing Costs

	(thousands of dollars)
	2004			2003
Total interest costs	$	890,317		$	909,226
Interest reimbursed from Crown corporations and others		(296,506	)		(314,282	)
Net foreign exchange loss		3,660			9,771
Other costs		5,231			6,679
Total Debt Servicing Costs	$	602,702		$	611,394

10. Operating Expenditure by Function and by Object

Operating expenditure by function is reported as follows:

	(thousands of dollars)
	2004		2003
Agriculture	$	333,179	$	312,762
Community development		216,738		189,543
Economic development		102,919		101,007
Education		1,228,316		1,068,950
Environment and natural resources		164,652		169,116
Health		2,515,823		2,342,835
Protection of persons and property		272,464		263,996
Social services and assistance		680,745		681,073
Transportation		326,137		325,854
Other		324,740		307,315
Total Operating Expenditure	$	6,165,713	$	5,762,451


22		Public Accounts, 2003-04

General Revenue Fund
Notes to the Financial Statements

Operating expenditure by object is reported as follows:

	(thousands of dollars)
	2004		2003
Personal services	$	553,397	$	525,945
Travel		36,035		36,651
Transfers:
Government entities		2,237,307		2,075,265
Other		2,526,163		2,383,253
Supplier payments		519,160		530,716
Other		293,651		210,621
Total Operating Expenditure	$	6,165,713	$	5,762,451

11. Contingencies

Guaranteed debt

Debt of $113.4 million (2003 — $184.1 million) is guaranteed by the Minister of Finance. See Schedule 9 for a list of guaranteed debt.

Lawsuits

Up to $94.4 million may be paid, depending on the outcome of lawsuits in progress.

Indian and Northern Affairs Canada

The Government pays for certain social services provided to status Indians and submits claims to the federal government for the cost of these services. The Government believes these costs are the responsibility of the federal government and believes they are fully reimbursable. However, the federal government denies responsibility for a portion of these costs.

The Government is unable to determine whether or not the outstanding amounts will be reimbursed. The Government will account for any recovery resulting from the resolution of this contingency at the time of settlement. No provision for such a recovery has been made in these financial statements.

Crop Insurance Liability

The Saskatchewan Crop Insurance Corporation administers the federal/provincial Crop Insurance Program. Premiums for the program are paid by the General Revenue Fund, the federal government and producers. A portion of the premiums is required to be paid to reinsurance funds established by the Province and the federal government. In certain circumstances, the reinsurance funds pay benefits to the Corporation.

In any year, where crop insurance indemnities exceed net premiums and any crop insurance fund balance, the shortfall is derived from one or both of the Crop Reinsurance Fund of Saskatchewan and the Crop Reinsurance Fund of Canada for Saskatchewan.

At March 31, 2004 the Crop Reinsurance Fund of Saskatchewan had a deficiency of $134.2 million (2003 — $82.3 million). Crop insurance premiums are actuarially set to cover indemnities over the long term. In the event that the deficiency in the Saskatchewan reinsurance fund cannot be recovered from future premiums, the General Revenue Fund is required to pay the deficiency.

12. Commitments

Major financial commitments include:

treaty land entitlement agreement commitments valued at approximately $29.5 million over eight years; rural municipality and school division tax loss compensation of approximately $11.3 million as land achieves reserve status over the course of the agreements;
research and development projects for agriculture technology and opportunities in the agri-food industry, $14.0 million over five years;
Weyerhaeuser Canada Ltd. road maintenance and construction agreement, term indefinite, five year estimate $18.4 million;
capital grant projects, over the next thirty years, $48.3 million;
contracts for highway improvement, $45.3 million;
computer service agreements, $25.0 million over five years;
projects to expand innovation and enhance the competitive ability of the Saskatchewan economy, $39.6 million over five years; and
Saskatchewan Association of Rehabilitation Centres, for beverage container collection and recycling, $42.4 million over four years.


General Revenue Fund		23

General Revenue Fund
Notes to the Financial Statements

Included are commitments for agriculture $14.0 million, education $41.2 million, environment and natural resources $42.4 million, health $18.8 million, transportation $63.7 million, community development $40.8 million, economic development $39.6 million, social services and assistance $5.0 million and other $8.3 million.

13. Related Party Transactions

Included in these financial statements are transactions with various Saskatchewan Crown corporations, agencies, boards, and commissions related to the General Revenue Fund by virtue of common control by the Government of Saskatchewan.

Routine operating transactions with related parties are recorded at the rates charged by those organizations and are settled on normal trade terms. These transactions include:

payments to related parties of approximately $115.2 million (2003 — $113.8 million) to Saskatchewan Property Management Corporation and $15.6 million (2003 — $14.3 million) to Saskatchewan Telecommunications Holding Corporation;
taxation and non-renewable resource revenue received from related parties during 2003-04 of approximately $69.6 million (2003 — $69.0 million). In addition, Saskatchewan Provincial Sales Tax and Fuel Tax are received from related parties on all taxable purchases.

Other transactions with related parties and amounts due to or from them are described separately in these financial statements.

14. Trust Funds

Trust funds are property held and administered on behalf of beneficiaries. Trust assets are not owned by the Government and the Government has no equity in the funds. Therefore, trust funds are not included in the reporting entity.

Fund balances held and administered by the General Revenue Fund at March 31, 2004, were as follows:

	(thousands of dollars)
	2004		2003
Pension plans¹	$	6,062,152	$	5,414,208
Public Guardian and Trustee of Saskatchewan		136,396		121,788
Other trusts		20,346		41,418
Total Trust Funds	$	6,218,894	$	5,577,414

¹	The balance reflects the latest financial statements of the funds closest to March 31, 2004.

15. Comparative Figures

Certain of the 2003 figures have been reclassified to conform with the current year presentation. With regard to expenditures, the figures are reported on the same basis as the Estimates for the prior year.

16. Debt Reduction Account

This account was established pursuant to The Balanced Budget Act. The Debt Reduction Account is an accounting of the accumulated surpluses of the General Revenue Fund commencing April 1, 1995.

	(thousands of dollars)
	Budget		Actual
Debt reduction account, beginning of year	$	631,600	$	631,600
Adjustment to debt reduction account, beginning of year		--		(46,087	)
Reduction in accumulated deficit for the year		134		983
Debt Reduction Account, End of Year	$	631,734	$	586,496

17. Adjustment to Accumulated Deficit

During the year, a change was made to the accounting treatment for transfers under the Net Income Stabilization Account (NISA) resulting in a $46.1 million reduction in agriculture expenditure and a corresponding increase in opening accumulated deficit.


24		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

For the Year Ended March 31, 2004

Schedule 1 - Accounts Receivable

	(thousands of dollars)
	2004			2003
Taxation	$	179,967		$	155,021
Non-renewable resources		107,240			137,106
Transfers from Government entities		182,573			129,452
Other own-source revenue		58,816			57,189
Transfers from the federal government		50,384			58,609
Other		56,352			59,560
		635,332			596,937
Provision for loss		(59,968	)		(65,663	)
Total Accounts Receivable	$	575,364		$	531,274

Accounts receivable include $185.3 million due from related parties (2003 — $132.1 million).

Schedule 2 - Loans to Crown Corporations

						(thousands of dollars)
						2004		2003
Short-term Loans

Agricultural Credit Corporation of Saskatchewan						$	9,100	$	10,100
Education Infrastructure Financing Corporation							--		20,840
Information Services Corporation of Saskatchewan							30,880		34,606
Municipal Financing Corporation of Saskatchewan							--		3,407
Saskatchewan Crop Insurance Corporation							77,000		63,000
Saskatchewan Housing Corporation							--		16,951
Saskatchewan Opportunities Corporation							26,968		15,800
Saskatchewan Water Corporation							13,378		10,451
SaskEnergy Incorporated							47,500		78,300
Total Short-term Loans							204,826		253,455
		Principal Outstanding		Sinking Fund Equity
Long-term Loans
Agricultural Credit Corporation of Saskatchewan	$	--	$	--			--		13,517
Crown Investments Corporation of Saskatchewan		--		--			--		15,476
Education Infrastructure Financing Corporation		--		--			--		17,384
Information Services Corporation of Saskatchewan		30,000		--			30,000		30,000
Investment Saskatchewan Inc.		20,919		(5,675	)		15,244		--
Municipal Financing Corporation of Saskatchewan		14,391		--			14,391		9,391
Saskatchewan Crop Insurance Corporation		100,000		--			100,000		50,000
Saskatchewan Housing Corporation		83,004		(3,055	)		79,949		80,718
Saskatchewan Opportunities Corporation		130,000		(4,988	)		125,012		126,174
Saskatchewan Power Corporation		2,093,792		(128,395	)		1,965,397		1,906,677
Saskatchewan Property Management Corporation		5,500		(1,409	)		4,091		4,821
Saskatchewan Telecommunications Holding Corporation		412,521		(36,135	)		376,386		416,831
Saskatchewan Water Corporation		44,201		(4,347	)		39,854		39,044
SaskEnergy Incorporated		684,187		(27,110	)		657,077		663,289
Total Long-term Loans	$	3,618,515	$	(211,114	)		3,407,401		3,373,322
Total Loans to Crown Corporations						$	3,612,227	$	3,626,777


General Revenue Fund		25

General Revenue Fund
Schedules to the Financial Statements

Schedule 3 - Other Loans

						(thousands of dollars)
	2004					2003
Agriculture, Food and Rural Revitalization
Agricultural Credit Corporation of Saskatchewan				$	10,250				$	10,250
Short-term Hog Loans	$	14,626				$	12,168
Provision for Loss		(2,273	)		12,353		(1,895	)		10,273

Finance
Treasury Advances					1,205					1,337

Industry and Resources
Economic Development Loans		20,083				��	18,076
Provision for Loss		(6,420	)		13,663		(5,205	)		12,871

Learning
Saskatchewan Student Aid Fund					83,240					86,240

Other					767					661
Total Other Loans				$	121,478				$	121,632


26		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

Schedule 4 - Accounts Payable and Accrued Liabilities

	(thousands of dollars)
	2004		2003
Personal services	$	39,029	$	48,033
Travel		3,539		3,824
Transfers		217,708		300,269
Supplier payments		67,792		81,288
Accrued interest		167,297		161,446
Transfers payable to the federal government		120,557		22,518
Other		367,870		215,947
Total Accounts Payable and Accrued Liabilities	$	983,792	$	833,325

Total includes $107.0 million payable to related parties (2003 — $145.7 million) and $406.2 million payable to the federal government (2003 — $160.6 million).

Schedule 5 - Deposits Held

	(thousands of dollars)
	2004		2003
Deposits held on behalf of Government entities and others
Agri-Food Innovation Fund	$	3,986	$	5,203
Cattle Marketing Deductions Fund		4,519		5,140
Extended Health Care Plans		8,477		8,253
Fiscal Stabilization Fund		366,000		577,000
Liquor and Gaming Authority		39,181		17,932
New Crops Insurance Program		8,903		8,651
Public Employees Dental Fund		11,382		12,828
Queen's Bench Court Accounts		10,559		10,486
Saskatchewan Agricultural Stabilization Fund		13,097		13,738
Saskatchewan Crop Insurance Corporation		15,137		5,997
Saskatchewan Student Aid Fund		40,225		61,749
School Division Tax Loss Compensation Fund		6,130		4,326
Teachers' Superannuation Commission		3,973		4,259
Transportation Partnership Fund		4,160		5,104
Other		27,755		34,793
Conditional Receipts		7,314		4,525
Total Deposits Held	$	570,798	$	779,984


General Revenue Fund		27

General Revenue Fund
Schedules to the Financial Statements

Schedule 6 - Debt

								(thousands of dollars)
	2004									2003
	Promissory Notes		Debentures		Sinking Funds¹			Debt		Debt
Crown Corporation Purposes
Agricultural Credit Corporation of Saskatchewan	$	9,100	$	--	$	--		$	9,100	$	23,617
Crown Investments Corporation of Saskatchewan		--		--		--			--		15,476
Education Infrastructure Financing Corporation		--		--		--			--		38,224
Information Services Corporation of Saskatchewan		30,880		30,000		--			60,880		64,606
Investment Saskatchewan Inc.		--		20,919		(5,675	)		15,244		--
Municipal Financing Corporation of Saskatchewan		--		14,391		--			14,391		12,798
Saskatchewan Crop Insurance Corporation		77,000		100,000		--			177,000		113,000
Saskatchewan Housing Corporation		--		83,004		(3,055	)		79,949		97,669
Saskatchewan Opportunities Corporation		26,968		130,000		(4,988	)		151,980		141,974
Saskatchewan Power Corporation		--		2,093,792		(128,395	)		1,965,397		1,906,677
Saskatchewan Property Management Corporation		--		5,500		(1,409	)		4,091		4,821
Saskatchewan Telecommunications Holding Corporation		--		412,521		(36,135	)		376,386		416,831
Saskatchewan Water Corporation		13,378		44,201		(4,347	)		53,232		49,495
SaskEnergy Incorporated		47,500		684,187		(27,110	)		704,577		741,589
Total Crown Corporation Purposes		204,826		3,618,515		(211,114	)		3,612,227		3,626,777
General Government Purposes		30,174		8,737,885		(736,422	)		8,031,637		7,821,426
Debt²	$	235,000	$	12,356,400	$	(947,536	)	$	11,643,864	$	11,448,203

Debt repayable in foreign currency has been restated in Canadian dollar equivalents.

¹	See Schedule 7 for information on sinking funds.
²	See Schedule 8 for information on debt by maturity.


28		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

Schedule 7 - Sinking Funds

										(thousands of dollars)
	2003		2004
	Sinking Funds		Contributions		Earnings		Redemptions			Currency Adjustment			Sinking Funds
Crown Corporation Purposes
Investment Saskatchewan Inc.¹	$	5,443	$	--	$	232	$	--		$	--		$	5,675
Saskatchewan Housing Corporation		2,286		585		184		--			--			3,055
Saskatchewan Opportunities Corporation		3,826		850		312		--			--			4,988
Saskatchewan Power Corporation		124,107		14,705		7,966		(10,529	)		(7,854	)		128,395
Saskatchewan Property Management Corporation		679		674		56		--			--			1,409
Saskatchewan Telecommunications
Holding Corporation		34,211		2,952		2,156		--			(3,184	)		36,135
Saskatchewan Water Corporation		3,771		302		274		--			--			4,347
SaskEnergy Incorporated		20,897		4,540		1,673		--			--			27,110
Total Crown Corporation Purposes		195,220		24,608		12,853		(10,529	)		(11,038	)		211,114
General Government Purposes		690,949		58,816		46,868		(30,234	)		(29,977	)		736,422
Total Sinking Funds	$	886,169	$	83,424	$	59,721	$	(40,763	)	$	(41,015	)	$	947,536

¹ Sinking fund transferred from Crown Investments Corporation of Saskatchewan, effective October 1, 2003.
The market value of sinking funds at March 31, 2004 is $1,010.8 million (2003 — $934.9 million).
Sinking fund earnings include gains on investment sales of $12.5 million (2003 — $22.3 million).
Annual contributions, when established by Order in Council, are set at not less than one per cent of debentures outstanding. The redemption value is based on the market value of the sinking fund units at the date of redemption.

The aggregate amount of contributions estimated to be required in each of the next five fiscal years to meet sinking fund requirements are:

													(thousands of dollars)
	2005			2006			2007			2008			2009			Total
Contributions - Canadian dollar debt	$	71,566		$	62,929		$	59,929		$	57,929		$	57,630		$	309,983
Contributions - U.S. dollar debt (CDN $)		17,207			17,207			17,207			17,207			14,664			83,492
Total Contributions		88,773			80,136			77,136			75,136			72,294			393,475
Recoverable from Crown corporations		(26,754	)		(26,359	)		(25,541	)		(25,541	)		(22,699	)		(126,894	)
General Government Purposes	$	62,019		$	53,777		$	51,595		$	49,595		$	49,595		$	266,581

Sinking Fund assets are as follows:	(thousands of dollars)
	2004		2003
Long-term Investments
Government of Saskatchewan securities, coupon interest range, 4.9% to 10.3%; range of
term to maturity, 4.0 to 29.4 years	$	323,003	$	280,970
Government of Canada securities, coupon interest range, 5.1% to 8.0%; range of term to
maturity, 3.5 to 25.2 years		36,643		110,008
Other provincial governments' securities, coupon interest range, 4.8% to 9.5%; range of
term to maturity, 5.7 to 35.3 years		397,949		344,190
Government of the United States securities, coupon interest range, 5.4% to 9.3%; range of
term to maturity, 12.1 to 26.9 years		54,996		44,664
Cash, short term investments and accrued interest		134,945		106,337
Total Sinking Funds	$	947,536	$	886,169

Short term investments include $16.0 million (2003 — $16.0 million) Province of Saskatchewan securities.
Cash, short term investments and accrued interest are disclosed net of $1.6 million in liabilities (2003 — $1.8 million).
Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $359.8 million Canadian (2003 — $371.0 million) at the exchange rate in effect at March 31, 2004, 1.3105 (2003 — 1.4693).


General Revenue Fund		29

General Revenue Fund
Schedules to the Financial Statements

Schedule 8 - Debt by Maturity

													(thousands of dollars)
	2004												2003
Year of Maturity	Canadian Dollar Debt			U.S. Dollar Debt (CDN $)			Total (CDN $)			Average Coupon Rate			Total (CDN $)			Average Coupon Rate
Short-term promissory notes	$	235,000		$	--		$	235,000			2.07	%	$	397,500			2.87	%
2003-04		--			--			--				--		528,426			8.09	%
2004-05		1,313,976			--			1,313,976			8.99	%		1,316,200			8.99	%
2005-06		1,004,556			--			1,004,556			6.82	%		1,007,007			6.82	%
2006-07		1,245,223			--			1,245,223			6.22	%		1,246,288			6.22	%
2007-08		620,425			254,237			874,662			6.36	%		906,933			6.38	%
2008-09		729,227			--			729,227			5.51	%		--
1 - 5 years		5,148,407			254,237			5,402,644						5,402,354
6-10 years		3,088,416			429,397			3,517,813			7.05	%		3,181,845			7.26	%
11-15 years		589,284			--			589,284			10.23	%		1,031,663			9.01	%
16-20 years		458,259			1,048,400			1,506,659			8.71	%		1,593,510			8.81	%
21-25 years		525,000			--			525,000			6.75	%		175,000			8.75	%
26-30 years		1,000,000			--			1,000,000			6.13	%		900,000			6.15	%
More than 30 years		50,000			--			50,000			5.70	%		50,000			5.70	%
		10,859,366			1,732,034			12,591,400						12,334,372
Sinking funds		(587,732	)		(359,804	)		(947,536	)					(886,169	)
Debt	$	10,271,634		$	1,372,230		$	11,643,864					$	11,448,203

The average effective interest rate on debt during 2003-04 was 7.30% (2003 — 7.57%), and includes the impact of foreign exchange and the amortization of any premiums and discounts associated with the debentures.
The average term to maturity of debt outstanding at March 31, 2004 is 9.0 years (2003 — 8.4 years).
Debt includes Canada Pension Plan debentures of $1,081.6 million (2003 — $1,150.7 million). These debentures are callable in whole or in part before maturity, on 30 days prior notice, at the option of the Minister of Finance of Saskatchewan.
Total debt includes debentures of $440.0 million (2003 — $390.0 million) that provide the holder with a choice of dates on which the debt matures.
The year of maturity in the above table reflects the earliest possible date of maturity rather than the maximum term to maturity.
Sensitivity of Debt and Debt Servicing Costs
U.S. dollar debentures have been converted to Canadian dollars at the exchange rate in effect at March 31, 2004 of 1.3105 (2003 — 1.4693), except for 194.0 million U.S. dollars converted at the cross currency swaption rate of 1.3690.
A one cent change in the value of the U.S. dollar compared to the Canadian dollar from the March 31, 2004 level would change debt charges by $1.2 million in 2004-05 and debt by $14.5 million.
Debt includes floating rate debt of $2,262.2 million (2003 — $1,650.8 million). Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. A one percentage point increase in interest rates would increase debt servicing costs by $17.7 million in 2004-05.
Derivative Financial Instruments
Cross Currency Swaps
The following foreign denominated items have been hedged to Canadian dollars using cross currency swaps:
— debentures totalling 10.0 billion yen (2003 — 12.5 billion) fully hedged to $130.8 million Canadian (2003 — $161.8 million);
— debentures totalling 781.0 million U.S. dollars (2003 — 750.0 million) fully hedged to $1,089.0 million Canadian (2003 — $1,037.0 million); and
— interest payments on debentures of 50.0 million U.S. dollars (2003 — 0) hedged to Canadian at an exchange rate of of 1.3010.
In total, cross currency swaps on a notional value of $1,415.7 million of debt (2003 — $1,360.7 million) existed at March 31, 2004. The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.
Cross Currency Swaptions
U.S. dollar debt includes 194.0 million U.S. dollars (2003 — 0) that may be converted to $265.6 million Canadian (2003 — $0) at the option of third parties. These options expire on July 15, 2004 and August 1, 2004.
Interest Rate Swaps
Interest rate swaps on a notional value of $843.1 million of debt (2003 — $843.1 million) existed at March 31, 2004.
Foreign Currency Forward Exchange Contracts
Forward purchase commitments to acquire, during 2004-05, $4.7 million U.S. dollars (2003 — $7.9) at a cost of $6.2 million Canadian (2003 — $11.9) were in place at March 31, 2004.


30		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

Schedule 9 - Guaranteed Debt

	(thousands of dollars)
	2004		2003
Crown Corporations
The Power Corporation Act
Scotiabank	$	4,713	$	7,837
Luscar Ltd		--		21,785
Saskatchewan Power savings bonds
Series I - series VIl (matured)		46		60
The Saskatchewan Development Fund Act
Guaranteed investments		880		1,014
The Saskatchewan Telecommunications Act
Telebonds - series I (matured)		154		157
Total Crown Corporations		5,793		30,853
Other
The Farm Financial Stability Act
Breeder associations loan guarantees		17,901		16,831
Feeder associations loan guarantees		11,219		10,431
Agricultural Income Disaster Assistance Program		24		36
The Government Organization Act
The Saskatchewan Roughriders Football Club		--		80
The Housing and Special-care Homes Act
Senior citizens' housing		57		76
The Student Assistance and Student Aid Fund Act		151		275
The Industry and Commerce Development Act
Saskferco Products Inc.		36,088		66,440
The NewGrade Energy Inc. Act
NewGrade Energy Inc.		42,175		59,045
Total Other		107,615		153,214
Total Guaranteed Debt	$	113,408	$	184,067

In addition to the amount shown, there is a contingent liability for interest accrued on certain of these items.
Total guaranteed debt is net of a loss provision of $1.5 million (2003 — $1.8 million).

See page 31 for additional information.


General Revenue Fund		31

General Revenue Fund
Schedules to the Financial Statements

Schedule 9 (continued) - Guaranteed Debt

Scotiabank

The government is contingently liable for payments on certain leased mining equipment, which was assumed by the purchaser of a mining operation. The lease expires in 2004.

Luscar Ltd.

The Government guaranteed a $45 million promissory note issued by Luscar Ltd. to finance the purchase of a dragline from Saskatchewan Power Corporation. The amount recorded for 2003 is net of $23.2 million for Luscar Ltd’s equity in a sinking fund administered by the Minister of Finance. Luscar Ltd. repaid its promissory note in May 2003, extinguishing the guarantee.

Breeder and Feeder Associations

The Government provides guarantees to lenders who make loans to production associations. The Government guarantees repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million for the breeder or feeder option. Guarantees for each bison association are limited to $5 million for the feeder option. Guarantees for each sheep association are limited to $4 million for the breeder or feeder option.

Saskferco Products Inc.

The Government has guaranteed certain medium term notes issued by Saskferco to finance the construction of a nitrogen based fertilizer plant located near Belle Plaine. This guarantee pertains to debt denominated in U.S. dollars. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar. The amount recorded is net of $105.4 million (2003 — $123.1 million) for Saskferco’s equity in a sinking fund.

NewGrade Energy Inc. (NewGrade)

The Government has guaranteed certain long-term debt of NewGrade to a maximum of $360 million. A significant portion of this guarantee relates to U.S. dollar denominated debt. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar.


32		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

Schedule 10 - Revenue

			(thousands of dollars)
	Budget 2004		Actual 2004		Actual 2003
Taxation
Corporation capital	$	363,300	$	371,479	$	379,093
Corporation income		340,900		310,573		178,267
Fuel		350,400		356,773		331,512
Individual income		1,275,100		1,245,763		1,429,757
Sales		851,700		854,480		813,932
Tobacco		167,100		176,747		158,472
Other		73,600		81,881		77,067
Total Taxes		3,422,100		3,397,696		3,368,100
Non-renewable Resources
Natural gas		119,100		210,455		152,728
Oil		490,100		774,488		862,318
Potash		165,900		120,179		175,061
Other		41,700		35,840		53,542
Total Non-renewable Resources		816,800		1,140,962		1,243,649
Transfers from Government Entities
Crown Investments Corporation of Saskatchewan		200,000		200,000		300,000
Liquor and Gaming Authority		346,000		360,766		328,680
Other enterprises and funds		54,200		53,484		63,811
Total Transfers from Government Entities		600,200		614,250		692,491
Other Own-source Revenue
Fines, forfeits, and penalties		12,900		10,534		13,589
Interest, premium, discount, and exchange		49,700		61,228		59,852
Motor vehicle fees		122,200		119,412		116,964
Other licences and permits		42,200		46,426		42,350
Sales, services, and service fees		77,500		91,960		72,268
Transfers from other governments		14,700		19,294		12,907
Other		15,000		23,684		33,715
Total Other Own-source Revenue		334,200		372,538		351,645
Total Own-Source Revenue		5,173,300		5,525,446		5,655,885
Transfers from the Federal Government
Canada Health and Social Transfer		687,800		750,558		668,211
Equalization		172,300		41,284		(9,215	)
Other		194,600		241,110		141,824
Total Transfers from the Federal Government		1,054,700		1,032,952		800,820
Total Revenue	$	6,228,000	$	6,558,398	$	6,456,705


General Revenue Fund		33

General Revenue Fund
Schedules to the Financial Statements

Schedule 11 - Loss on Loans and Investments

	(thousands of dollars)
	2004		2003
Loans	$	79,539	$	2,103
Loss on sale of land		246		159
Total Loss on Loans and Investments	$	79,785	$	2,262

Schedule 12 - Net Change in Non-cash Operating Activities

	(thousands of dollars)
	2004			2003
Decrease (Increase) in prepaid expenditures	$	1,036		$	(126	)
Increase in accounts receivable		(44,090	)		(51,871	)
Increase in deferred charges		(1,567	)		(1,157	)
Increase in accounts payable and accrued liabilities		150,467			182,219
Decrease in unearned revenue		(1,781	)		(14,924	)
Net Change in Non-cash Operating Activities	$	104,065		$	114,141


34		Public Accounts, 2003-04

General Revenue Fund
Schedules to the Financial Statements

Schedule 13 - Investing Activities

						(thousands of dollars)
	2004					2003
	Receipts			Disbursements		Receipts			Disbursements
Loans
Agricultural Credit Corporation of Saskatchewan	$	14,517		$	--	$	20,434		$	4,700
Crown Investments Corporation of Saskatchewan		--			--		154,108			--
Education Infrastructure Financing Corporation		--			39,674		--			38,224
Information Services Corporation of Saskatchewan		3,726			--		--			10,270
Municipal Financing Corporation of Saskatchewan		3,407			5,000		15,184			3,407
Saskatchewan Crop Insurance Corporation		--			64,000		--			113,000
Saskatchewan Housing Corporation		16,951			--		56,955			16,951
Saskatchewan Opportunities Corporation		--			11,168		19,401			--
Saskatchewan Power Corporation		140,935			300,000		--			100,000
Saskatchewan Telecommunications Holding Corporation		22,641			--		--			--
Saskatchewan Water Corporation		714			5,027		669			11,693
SaskEnergy Incorporated		30,799			--		91,300			50,000
Other		73,279			74,766		58,860			81,273
Total Loan Receipts and Disbursements		306,969			499,635		416,911			429,518
Sinking Funds
Contributions		24,608			83,424		24,459			81,925
Debt redemption funded from sinking funds		30,234			--		--			--
Total Sinking Fund Receipts and Disbursements		54,842			83,424		24,459			81,925
Other
Equity Investment in Crown Investments Corporation of
Saskatchewan		--			--		61,300			--
Other		1,635			7		1,258			7
Total Other Receipts and Disbursements		1,635			7		62,558			7
Total Receipts and Disbursements		363,446		$	583,066		503,928		$	511,450
Net Disbursements	$	(219,620	)			$	(7,522	)

Fiscal Stabilization Fund
(unaudited)

This page left blank intentionally.


Fiscal Stabilization Fund		37

Fiscal Stabilization Fund
Schedule of Transfers and Accumulated Balance

For the Year Ended March 31, 2004
(unaudited)

				(thousands of dollars)
	Budget 2004			Actual 2004			Actual 2003
Balance, beginning of year	$	577,000		$	577,000		$	495,000
Transfer (to) from the General Revenue Fund		(392,700	)		(211,000	)		82,000
Balance, End of Year	$	184,300		$	366,000		$	577,000

The Fiscal Stabilization Fund (Fund) was established April 1, 2000, by The Fiscal Stabilization Fund Act. Its purpose is to stabilize the fiscal position of the Government to facilitate long-term planning.

Stabilization occurs through transfers between the Fund and the General Revenue Fund (GRF), as approved from time to time by Treasury Board.

Transfers to the Fund from the GRF are statutory disbursements.

Amounts transferred to the GRF from the Fund are available for expenditure subsequent to receiving required approval from the Legislative Assembly.

This page left blank intentionally.

Summary Financial Statements

This page left blank intentionally.


Summary Financial Statements		41

Government of Saskatchewan
Responsibility for Summary Financial Statements

The Government is responsible for the Summary Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to get reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements following the Government’s stated accounting policies and using the Government’s best estimates and judgement when appropriate. He uses information from the accounts of the General Revenue Fund, Crown corporations, agencies, and other funds to prepare these statements.

The Provincial Auditor expresses an independent opinion on these statements. His report states the scope of his audit and opinion and appears on the following page.

Treasury Board approves the Summary Financial Statements. The Minister of Finance tables the statements in the Legislative Assembly as part of the Public Accounts. The Legislative Assembly refers the Public Accounts to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Harry Van Mulligen
Harry Van Mulligen
Minister of Finance

/s/ Ron Styles
Ron Styles
Deputy Minister of Finance

/s/ Terry Paton
Terry Paton
Provincial Comptroller

Regina, Saskatchewan
June 2004

This page left blank intentionally.


Summary Financial Statements		43

Auditor’s Report

To the Members of the Legislative Assembly
of Saskatchewan

I have audited the summary statement of financial assets, liabilities, and accumulated deficit of the Government of Saskatchewan as at March 31, 2004 and the summary statements of revenue, expenditure, and accumulated deficit and cash flow for the year then ended. These financial statements are the responsibility of Treasury Board. My responsibility is to express an opinion on these financial statements based on my audit.

In my opinion, these summary financial statements present fairly, in all material respects, the financial position of the Government of Saskatchewan as at March 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles for governments.


Regina, Saskatchewan June 9, 2004		/s/ Fred Wendel Fred Wendel, CMA, CA Provincial Auditor

This page left blank intentionally.


Summary Financial Statements		45

Government of Saskatchewan
Summary Statement of Financial Assets, Liabilities, and Accumulated Deficit

As at March 31, 2004

							(thousands of dollars)
Schedule				2004						2003
Financial Assets
Cash and temporary investments (note 2)				$	842,334					$	604,992
Prepaid expenditures					21,585						21,465
1 Accounts receivable					850,000						845,649
Inventories held for resale					2,173						3,273
Land held for resale (note 3)					117,014						119,166
Deferred charges					61,502						62,154
2 Loans and mortgages receivable					147,491						129,642
3 Investment in government business enterprises					2,425,625						2,193,579
4 Other investments					712,475						722,205
Total Financial Assets					5,180,199						4,702,125

Liabilities
5 Accounts payable and accrued liabilities					1,351,921						1,271,462
6 Other liabilities					180,983						154,424
7 Unearned revenue					216,966						215,077
8,9&10 Public debt (note 6)	$	8,723,735					$	8,505,573
Unamortized foreign exchange loss		(50,030	)		8,673,705			(136,689	)		8,368,884
Pension liabilities (note 7a)					4,052,656						3,976,165
Total Liabilities					14,476,231						13,986,012
Accumulated Deficit				$	(9,296,032	)				$	(9,283,887	)

(See accompanying notes)

Tangible capital assets (note 4)

Contingencies and commitments (notes 12 and 13)

11	Guaranteed debt (note 12)


46		Public Accounts, 2003-04

Government of Saskatchewan
Summary Statement of Revenue, Expenditure, and Accumulated Deficit

For the Year Ended March 31, 2004

	(thousands of dollars)
Schedule	2004			2003
Revenue
12 Taxation	$	3,398,834		$	3,369,241
12 Non-renewable resources		1,140,962			1,243,649
12 Other own-source revenue		1,057,727			996,337
12 Transfers from the federal government		1,268,975			1,413,854
Total Revenue		6,866,498			7,023,081

Expenditure
Agriculture		673,826			1,328,542
Community development		255,424			236,309
Debt charges (note 9)		927,833			894,389
Economic development		133,159			108,516
Education		1,052,946			988,977
Environment and natural resources		189,312			242,475
Health		2,730,134			2,557,994
Protection of persons and property		309,764			302,556
Social services and assistance		785,798			794,159
Transportation		329,185			328,400
Other		359,978			347,173
Total Expenditure (note 10)		7,747,359			8,129,490
Deficit from government service organizations		(880,861	)		(1,106,409	)
3 Income from government business enterprises		734,016			452,755
Deficit		(146,845	)		(653,654	)
Accumulated deficit, beginning of year		(9,283,887	)		(8,708,064	)
Adjustment to accumulated deficit (note 15)		134,700			77,831
Accumulated Deficit, End of Year (note 8)	$	(9,296,032	)	$	(9,283,887	)

(See accompanying notes)


Summary Financial Statements		47

Government of Saskatchewan
Summary Statement of Cash Flow

For the Year Ended March 31, 2004

	(thousands of dollars)
Schedule	2004			2003
Operating Activities
Deficit	$	(146,845	)	$	(653,654	)
Add (deduct) non-cash items
3 Income from government business enterprises		(734,016	)		(452,755	)
Amortization of foreign exchange loss		3,660			9,771
13 Net gain on other investments		(10,574	)		(10,725	)
2 Addition to (reduction of) provision for loss on loans and mortgages		15,515			(995	)
Dividends received from other investments		9,736			1,281
3 Dividends received from government business enterprises		682,757			506,922
14 Net change in non-cash operating activities		79,629			91,458
Adjustment to accumulated deficit (note 15)		(46,087	)		--
Cash Used for Operating Activities		(146,225	)		(508,697	)

Investing Activities
Disposal of land held for resale		2,152			5,065
2 Net increase in loans and mortgages receivable		(33,363	)		(13,221	)
Acquisition of other investments		(102,087	)		(63,933	)
Disposition of other investments		112,655			66,710
Cash Used for Investing Activities		(20,643	)		(5,379	)

Financing Activities
Proceeds from public debt		721,912			703,475
Repayment of public debt		(420,752	)		(284,475	)
Increase in other liabilities		26,559			3,060
Increase in pension liabilities		76,491			23,682
Cash Provided by Financing Activities		404,210			445,742

Increase (Decrease) in cash and temporary investments		237,342			(68,334	)
Cash and temporary investments, beginning of year		604,992			673,326
Cash and Temporary Investments, End of Year	$	842,334		$	604,992

(See accompanying notes)


48		Public Accounts, 2003-04

Government of Saskatchewan
Notes to the Summary Financial Statements

For the Year Ended March 31, 2004

1. Significant Accounting Policies

These Summary financial statements are prepared in accordance with generally accepted accounting principles for senior governments, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. The significant accounting policies are summarized below.

a) Reporting entity

The financial statements report the financial activities of organizations controlled by the Government.

Trusts administered by the Government are excluded from the reporting entity.

A listing of government organizations included in the reporting entity is provided in schedule 15. Unless otherwise noted, the financial activities of all subsidiaries of these organizations have also been included.

b) Method of consolidation

The financial statements of all government organizations, except those designated as government business enterprises, are consolidated after adjustment to a basis consistent with the accounting policies described in note 1(c). These organizations are referred to as government service organizations. Significant inter-organization balances and transactions are eliminated.

Government business enterprises are defined as self-sufficient organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity.

Government business enterprises are accounted for by the modified equity method. Using this method, the Government’s investment in government business enterprises, which is initially recorded at cost, is adjusted annually to include the net earnings or losses and certain other net equity changes of the enterprise without adjustment to conform with the accounting policies described in note 1(c). With the exception of dividends declared by March 31, inter-organization balances and transactions are not eliminated.

Financial results of government organizations whose fiscal year-ends are other than March 31 are adjusted for transactions having a significant impact on the financial position or operating results of the government reporting entity.

c) Basis of accounting

The accrual basis of accounting is used and specifically expressed as follows:

Revenue

Revenues are recorded on the accrual basis except for receipts from the federal government for corporate and personal income taxes, which are recorded on the cash basis. Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met.

Expenditure

Expenditures are recorded on the accrual basis and include the cost of tangible capital assets and inventories of supplies acquired during the year. Government transfers are recognized as expenditures in the period during which the transfer is authorized and any eligibility criteria are met.

Assets

Financial assets are those assets on hand at the end of an accounting period which could provide resources to discharge existing liabilities or finance future operations.

Temporary investments are recorded at cost which approximates market value.

Inventories held for resale are recorded at the lower of cost and net realizable value. Inventories of supplies are recorded as an expenditure in the period acquired.

Land held for resale is valued at the lower of cost or net realizable value, on an aggregate basis.

Deferred charges include issue costs and net discounts or premiums incurred on the issue of public debt. They are recorded at cost and amortized on a straight-line basis over the remaining life of the debt issue.


Summary Financial Statements		49

Government of Saskatchewan
Notes to the Summary Financial Statements

Loans and mortgages receivable are initially recorded at cost. Where there has been a loss in value that is other than a temporary decline, the loan or mortgage is written down to recognize the loss. Interest is recognized on the accrual basis except where collection is uncertain. Interest is then recorded on the cash basis.

Other investments consist of: equity investments; portfolio investments; bonds, debentures and other advances; and property holdings. These investments are accounted for by various methods as described below and are written down to their fair value when there is evidence of a permanent decline in value.

Equity investments exist when the Government holds shares of private or public companies and exercises significant influence but has less than a controlling interest or when the Government has shared control, as in government business partnerships. These investments are accounted for by the modified equity method. Using this method, the Government’s investment, which is initially recorded at cost, is adjusted annually for the Government’s share of the investee’s net earnings or losses and is reduced by dividends and partnership distributions received from these investments.

Government business partnerships are equity investments where there is a contractual arrangement between the Government and one or more partners outside the reporting entity and where these partners share, on an equitable basis, the significant risks and benefits associated with operating the partnership. These partnerships are self-sufficient organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity. Government business partnerships are recorded using the modified equity method.

Portfolio investments exist when the Government holds shares of private or public companies and does not exercise significant influence. Portfolio investments are recorded at cost, and dividends from these shares are recorded as income when receivable.

Bonds, debentures and other advances and Property holdings are recorded at amortized cost.

Tangible capital assets held by government service organizations are recorded as an expenditure in the period acquired. Capital assets held by government business enterprises, as disclosed in schedule 3, are generally recorded at cost and amortized on a straight-line basis over the estimated productive life of each asset.

Liabilities

Liabilities include obligations to individuals and organizations outside the government reporting entity as a result of transactions and events occurring prior to year-end. They consist of: financial obligations to provide authorized transfers, where any eligibility criteria have been met, to repay borrowings and to pay for goods and services acquired prior to year-end; and obligations to deliver goods or services in the future, where payment has been received.

Unearned revenue is revenue that will be earned in a subsequent fiscal year and includes restricted funding from the federal government and other organizations.

Public debt consists of debt of government service organizations recorded net of amounts issued on behalf of and reimbursable from government business enterprises. Total public debt, as disclosed in schedules 8 and 10, includes public debt and the debt of government business enterprises.

Public debt is recorded at par. Premiums, discounts and issue costs are recorded as deferred charges and are amortized on a straight-line basis over the remaining life of the debt issue.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. Premiums and discounts on long-term investments within these sinking funds are amortized by the type of security on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Unamortized foreign exchange loss includes unrealized foreign exchange gains and losses resulting from the conversion of debentures due and sinking funds held in a foreign currency to the Canadian dollar equivalent at the exchange rate in effect at March 31. Realized foreign exchange gains and losses are included in the surplus or deficit. Unrealized foreign exchange gains and losses are amortized on a straight-line basis over the remaining life of the debt issue.

Pension liabilities are calculated using the projected benefit method prorated on services. Pension fund assets are valued at market related values. Changes in the pension liabilities as a result of estimation adjustments due to experience gains and losses and changes in actuarial assumptions are amortized on a straight-line basis over the expected average remaining service life of the related employee group. Gains or losses as a result of plan amendments are recognized in the period of the plan amendment.

Guaranteed debt includes guarantees of the Government made through specific agreements or legislation to repay promissory notes, bank loans, lines of credit, mortgages and other securities. Loss provisions on guaranteed debt are recorded when it is likely that a loss will occur. The amount of the loss provision represents the Government’s best estimate of future payments less recoveries. The loss provision is recorded as a liability and an expenditure in the year determined and is adjusted as necessary to ensure it equals the expected payout of the guarantee.


50		Public Accounts, 2003-04

Government of Saskatchewan
Notes to the Summary Financial Statements

2. Cash and Temporary Investments

Temporary investments are generally for less than 30 days and have an average effective interest rate of 2.25 per cent.

3. Land Held for Resale

The estimated net realizable value of the Government’s land held for resale at March 31, 2004 is $214.1 million (2003 — $211.5 million).

4. Tangible Capital Assets

The Government has a significant investment in tangible capital assets that have a useful life of greater than one year. These assets are a key component in the delivery of government programs and provide on-going value to the public.

The Government’s tangible capital assets held by government service organizations are recorded as an expenditure in the period acquired and are not included in the Statement of Financial Assets, Liabilities, and Accumulated Deficit. In the current year, government service organizations acquired tangible capital assets in the amount of $303.9 million (2003 restated — $318.1 million).

The following table discloses the tangible capital assets held by government service organizations and does not include assets acquired by right or heritage assets. All recorded assets are disclosed at cost and are generally amortized on a straight-line basis over the estimated useful life of the asset.

																			(thousands of dollars)
	2004																					2003
	Land & Improve- ments			Infra- structure			Buildings & Improve- ments			Machinery & Equipment			Trans- portation Equipment			Office & Information Technology			Total			Total (Restated²)
Estimated useful life	5 years- Indefinite			3-60 years			3-50 years			2-33 years			2-40 years			2-20 years
Opening cost	$	196,501		$	3,096,368		$	2,382,809		$	705,956		$	151,678		$	290,321		$	6,823,633		$	6,598,540
Additions		6,721			137,364			81,435			37,028			8,373			32,977			303,898			318,131
Write-downs		--			--			--			(365	)		--			(144	)		(509	)		(10,447	)
Disposals		(381	)		(42,615	)		(12,679	)		(8,609	)		(7,576	)		(3,972	)		(75,832	)		(82,591	)
Closing Cost¹		202,841			3,191,117			2,451,565			734,010			152,475			319,182			7,051,190			6,823,633
Opening accumulated amortization		11,900			1,392,352			892,991			519,274			76,116			155,606			3,048,239			2,867,228
Annual amortization		1,173			90,430			81,708			32,437			7,472			36,470			249,690			259,553
Write-downs		--			--			--			(365	)		--			(144	)		(509	)		(5,790	)
Disposals		(46	)		(42,307	)		(10,378	)		(6,312	)		(5,580	)		(3,686	)		(68,309	)		(72,752	)
Closing accumulated amortization		13,027			1,440,475			964,321			545,034			78,008			188,246			3,229,111			3,048,239
Net Book Value of Tangible Capital Assets	$	189,814		$	1,750,642		$	1,487,244		$	188,976		$	74,467		$	130,936		$	3,822,079		$	3,775,394

¹	Closing cost includes work-in-progress of $45.0 million (2003 — $42.9 million) of which $31.0 million (2003 — $36.8 million) relates to the construction of buildings and improvements.

During the year, the Government revised certain policies for disclosing tangible capital assets. As well, certain tangible capital assets have been revalued and others disclosed for the first time. The changes have been implemented retroactively, resulting in a $40.6 million increase to the net book value at March 31, 2003.

5. Measurement Uncertainty

Measurement uncertainty exists in these financial statements in the accrual of pension obligations, non-renewable resources royalties, site restoration obligations, accident claims obligations and the federal government’s Equalization and Canada Health and Social Transfer payments. It also exists in the valuation of loans where repayment is contingent upon an organization’s cash flows. The uncertainty arises from factors such as the effect on accrued pension obligations of actual experience compared to actuarial estimations and assumptions; the effect on accrued royalties of price and production sensitivities in the royalty structures; the effect on site restoration obligations of actual experience compared to historical estimations and assumptions; the effect on accrued accident claims obligations of actual experience compared to actuarial estimations and assumptions; the effect on transfers from the federal government of changes in economic and demographic conditions in the Province and the country; and the effect of commodity prices on cash flows. Management considers that it is reasonably possible that changes in future conditions, occurring within one fiscal year, could require a material change in the amounts recognized.


Summary Financial Statements		51

Government of Saskatchewan
Notes to the Summary Financial Statements

6. Risk Management of Public Debt

The Government borrows funds in both domestic and foreign capital markets by issuing Government of Saskatchewan securities. As a result of these transactions, the Government is exposed to four types of risk: interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, the Government maintains a preference for fixed rate Canadian dollar denominated debt. Where market conditions dictate that other forms of debt are more attractive, the Government seeks opportunities to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract whose value is based on the value of another asset or index.

Interest rate risk is the risk that the Government’s debt charges will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest. The Government seeks opportunities to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. At March 31, 2004, 82.0 per cent (2003 — 86.5 per cent) of the Government’s gross public debt effectively carried a rate of interest that was fixed for greater than a one-year period.

Foreign exchange rate risk is the risk that the Government’s debt charges will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, the Government seeks opportunities to effectively convert it into Canadian dollar debt through the use of cross currency swaps. At March 31, 2004, 90.3 per cent (2003 — 83.3 per cent) of the Government’s gross public debt is effectively denominated in Canadian dollars.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties with good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2004, 100 per cent (2003 — 100 per cent) of the Government’s counterparties held a Standard and Poor’s credit rating of A or better.

Liquidity risk is the risk that the Government will not be able to meet its financial commitments over the short-term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

Schedule 10 provides more detailed information on the Government’s use of derivative financial instruments.

7. Retirement Benefits

The Government sponsors several defined benefit and defined contribution pension plans. The Government also participates in a joint defined benefit pension plan.

a) Pension Liabilities

Defined benefit pension plans provide benefits based on length of service and pensionable earnings. A typical defined benefit plan provides pensions equal to 2 per cent of a member’s average five years highest salary, multiplied by the years of service to a maximum of 35 years. Members contribute a percentage of salary, which may vary based on age, to their plan. Pensions and contribution rates are integrated with the Canada Pension Plan.

Joint defined benefit plans are governed by a formal agreement between the joint sponsors (i.e., employer and plan members), which establishes that the joint sponsors have shared control over the plan. Funding contributions are shared mutually between the employer and plan members. The sponsors share on an equitable basis, the significant risks of each plan. Accordingly, in a joint defined benefit plan, the Government accounts for only its portion of the plan. Plan assets and surpluses are restricted for member benefits or certain other purposes set out in the agreement. Plan benefits are determined on the same basis as defined benefit plans.


52		Public Accounts, 2003-04

Government of Saskatchewan
Notes to the Summary Financial Statements

Pension fund assets are valued at market related values based on actual market values adjusted by averaging recognition of realized and unrealized gains and losses on plan investments over a four year period.

Defined contribution pension plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary. The Government provides contributions at specified rates for employee current service.

Pension fund assets of government sponsored defined benefit and defined contribution plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

I) Government Service Organizations

i) Defined benefit plans and joint defined benefit plan

The two main defined benefit plans of government service organizations are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan, Anti-TB League Employees Superannuation Plan and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation.

The Government is required to match member current service contributions for all plans except Judges and the PSSP. Separate pension funds are maintained for all plans except the PSSP and the former Members of the Legislative Assembly Superannuation Fund, for which member contributions are received and pension obligations are paid directly by the Government.

The Government also participates in the Saskatchewan Healthcare Employees’ Pension Plan (SHEPP), a joint defined benefit plan for employees of its twelve Regional Health Authorities. The Government contributes to the plan at the ratio of 1.12 to 1 of employee contributions. Any actuarially determined deficiency is the responsibility of participating employers and employees in the ratio of 1.12 to 1.

Information on the defined benefit plans of government service organizations and the joint defined benefit plan follows:

	2004													2003
	TSP		PSSP			Others			SHEPP			Total		Total
Plan status		closed		closed			closed	¹		open			n/a		n/a
Member contribution rate, percentage of salary		7.85		7-9	²		5-9	²		4.5-6	²		n/a		n/a
Number of active members		4,424		1,755			73			28,737			34,989		36,005
Average age of active members, years		51.9		53			59			44.1			45.5		45.5
Former members entitled to deferred pension benefits		5,867		136			10			1,209			7,222		8,026
Number of superannuates and surviving spouses		10,008		5,782			2,197			7,155			25,142		24,644
Member contributions (thousands of dollars)	$	18,481	$	6,063		$	335		$	41,437		$	66,316	$	61,687
Government contributions (thousands of dollars)³		73,188		--			2,550			43,160			118,898		104,849
Benefits paid (thousands of dollars)		249,364		98,318			6,954			64,852			419,488		398,134

¹	Judges is open to new membership, all other plans are closed.

²	Contribution rate varies based on age upon joining the plan.

³	The Government's participating employer contributions for SHEPP represents approximately 93% of the total employer contributions to the plan.

The assumptions used to determine the actuarial value of the accrued benefit obligation and pension fund assets for TSP, PSSP and SHEPP are as follows:


	TSP	PSSP	SHEPP
Rate of compensation increase	3.50%	4.00%	6.00%¹
Expected long-term rate of return on plan assets	7.00%	n/a	6.75%
Discount rate	7.00%	6.25%	6.75%
Inflation rate	3.00%	3.00%	3.25%

¹	The rate of compensation increase is 6% for 2003 to 2005, and 4.25% per year thereafter.


Summary Financial Statements		53

Government of Saskatchewan
Notes to the Summary Financial Statements

The following table shows information based on the latest actuarial valuation extrapolated to March 31, 2004 for defined benefit plans and December 31, 2003 for the joint defined benefit plan:

												(thousands of dollars)
	2004													2003
Plan Name	Actuarial Valuation Date		Accrued Benefit Obligation		Pension Fund Assets		Net Obligation		Unamortized Estimation Adjustments ¹			Pension Liabilities		Pension Liabilities
TSP²		Jun. 30/03	$	4,137,353	$	1,623,832	$	2,513,521	$	(23,613	)	$	2,489,908	$	2,500,874
PSSP		Dec. 31/02		1,578,853		--		1,578,853		(129,103	)		1,449,750		1,394,593
Others		Various		244,589		157,483		87,106		(3,608	)		83,498		80,698
			$	5,960,795	$	1,781,315	$	4,179,480	$	(156,324	)		4,023,156		3,976,165
SHEPP³		Dec. 31/02											29,500		--
												$	4,052,656	$	3,976,165

¹	Amortized to income over 4 to 13 years, the estimated average remaining service life of active plan members at the time the estimation adjustment arises. The net estimation adjustment loss during the year is $353.0 million

²	The TSP accrued benefit obligation includes a liability of $43.0 million (2003 — $77.8 million) relating to the TSP disability provision. The TSP’s actual rate of return on plan assets was 21.3 per cent (2003 — (9.0) per cent).

The table only reports the Government’s employer portion of the pension liability. At December 31, 2003, SHEPP has a total accrued benefit obligation of $2.042 billion and pension fund assets of $1.890 billion at market related values and an unamortized estimation adjustment loss of $91.9 million. In 2003, the accrued benefit obligation of $1.8 billion approximated the market related value of the of the pension fund assets

At March 31, 2004, the market value of defined benefit plan investments was $1.8 billion (2003 — $1.6 billion) and the market value of the joint defined benefit plan investments was 2.0 billion (2003 – 1.7 billion). Of these amounts, 38.4 per cent (2003 — 43.5 per cent) was invested in fixed income securities and 57.8 per cent (2003 — 46.4 per cent) in equity investments.

ii) Defined contribution plans

The two main multi-employer defined contribution plans sponsored by the Government are the Public Employees Pension Plan (PEPP) and the Capital Pension Plan (Capital). The Government provides contributions to the plans at specified rates for employee current service. The Government also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation and to the Regina Civic Employees Superannuation and Benefit Plan (RCESP)². The Government has fully funded its share of contributions to the defined contribution plans.

Information on the defined contribution plans of government service organizations follows:

	2004													2003
	Government Sponsored
	PEPP			Capital			RCESP²			STRP		Total		Total
Plan status		open			open			open			n/a		n/a		n/a
Member contribution rate, percentage of salary		5-6.35	¹		5-5.5	¹		6.3-7.9	¹		n/a		n/a		n/a
Government contribution rate, percentage of salary		6.35			5.5-6	¹		6.3-7.9	¹		n/a		n/a		n/a
Government Service Organization participation:
Number of active members		20,249			599			1,525			n/a		22,373		22,489
Number of inactive members		10,290			16			115			n/a		10,421		9,677
Member contributions (thousands of dollars)	$	41,412		$	1,677		$	5,337			n/a	$	48,426	$	45,332
Government contributions (thousands of dollars)		42,311			1,775			5,337			30,729		80,152		73,785

¹	Contribution rate varies based on employee group.

Certain employees of a regional health authority participate in the RCESP, a multi-employer defined benefit pension plan established through a City bylaw. All costs, including costs of any actuarially determined deficiency, are equally shared by the employees and employers. At December 31, 2003, audited financial statements for the plan reported a benefit obligation of $638.8 million (2002 — $600 million) and assets at market value of $585.5 million (2002 — $516 million).


54		Public Accounts, 2003-04

Government of Saskatchewan
Notes to the Summary Financial Statements

iii) Pension expenditure

Pension expenditure for government service organizations is allocated to education expenditure, health expenditure and other expenditure. Pension interest expenditure is included in debt charges. The total pension expenditure of government service organizations includes the following:

	(thousands of dollars)
	2004			2003
Defined benefit plans:
Current period benefit cost	$	77,188		$	88,478
Amortization of estimation adjustments		(93,148	)		(116,169	)
		(15,960	)		(27,691	)
Employee contributions		(24,879	)		(27,655	)
		(40,839	)		(55,346	)
Cost of financing unfunded pension obligation (pension interest expenditure)		258,173			236,191
Total pension expenditure, defined benefit plans		217,334			180,845
Other plans:
Total pension expenditure, joint defined benefit plan		72,660			35,507
Total pension expenditure, defined contribution plans		80,152			73,785
Total Pension Expenditure	$	370,146		$	290,137

II) Government Business Enterprises

i) Defined benefit plans

The two main defined benefit plans of government business enterprises are the Power Corporation Superannuation Plan (SaskPower) and the Saskatchewan Telecommunications Pension Plan (SaskTel). Other plans include Saskatchewan Government Insurance Superannuation Plan, Liquor Board Superannuation Plan, and the Workers’ Compensation Board Superannuation Plan.

The Government contributes the amount necessary to fund the payment of pension benefits.

Information on the defined benefit plans of government business enterprises follows:

	2004											2003
	SaskPower			SaskTel			Others			Total		Total
Plan status		closed			closed			closed			n/a		n/a
Member contribution rate, percentage of salary		6-9	¹		7-9	²		6.5-9	²		n/a		n/a
Number of active members		592			753			146			1,491		1,534
Number of former members, superannuates and surviving spouses		1,743			1,602			469			3,814		3,828
Member contributions (thousands of dollars)	$	1,781		$	2,565		$	412		$	4,758	$	5,004
Government contributions (thousands of dollars)		498			7,038			2,079			9,615		2,868
Benefits paid (thousands of dollars)		39,451			43,165			7,393			90,009		89,756

¹	Contribution rate varies based on age upon joining the plan and employee group.

²	Contribution rate varies based on age upon joining the plan.

The assumptions used to determine the amounts under the defined benefit plans are as follows:


Rate of compensation increase	2.20%-4.50%
Expected long-term rate of return on plan assets	6.25%-7.25%
Discount rate	6.10%-6.25%
Inflation rate	2.20%-3.00%


Summary Financial Statements		55

Government of Saskatchewan
Notes to the Summary Financial Statements

Based on the latest actuarial valuations extrapolated to December 31, 2003 the present value of accrued pension benefits and the market related value of pension fund assets are shown in the table below:

										(thousands of dollars)
		2004											2003
Plan Name	Actuarial Valuation Date	Accrued Benefit Obligation		Fair Value of Assets		Plan Deficit		Unamoritized Amounts*		Pension (Surplus) Liabilities			Pension (Surplus) Liabilities
SaskPower	Sept. 30/03	$	701,410	$	648,319	$	53,091	$	70,954	$	(17,863	)	$	(21,362	)
SaskTel	Dec. 31/01		835,024		734,719		100,305		151,853		(51,548	)		(43,835	)
Others	Various		120,663		95,211		25,452		1,610		23,842			23,629
Total		$	1,657,097	$	1,478,249	$	178,848	$	224,417	$	(45,569	)	$	(41,568	)

* Includes unamortized transitional assets, unamortized (gains) losses and unamortized past service costs.

At December 31, 2003, 32.9 per cent (2002 — 48.0 per cent) of pension plan assets were invested in fixed income securities and 52.5 per cent (2002 — 43.5 per cent) in equity investments.

ii) Defined contribution plans

Information on the defined contribution plans of government business enterprises follows:

	2004							2003
	PEPP			Capital		Total		Total
Plan status		open			open		n/a		n/a
Member contribution rate, percentage of salary		5-6.35	¹		5-5.5		n/a		n/a
Number of active members		8,152			2,152		10,304		10,122
Number of inactive members		2,961			65		3,026		2,902
Member contributions (thousands of dollars)	$	19,021		$	4,775	$	23,796	$	22,064
Government contributions (thousands of dollars)		24,012			4,673		28,685		26,393

¹ Contribution rate varies based on employee group.

iii) Pension expense

Pension expense and pension interest expense for government business enterprises are included in income from government business enterprises. The pension expense (income) for the year for the defined benefit plans is $6.5 million (2003 — $(9.8) million) and $28.7 million (2003 — $26.4 million) for the defined contribution plans.

b) Other Future Benefit Plans

Other future benefit plans of government business enterprises include defined benefit severance plans for management employees, union employees and the supplementary superannuation plan. The present value of accrued benefits is $42.2 million (2003 — $38.9 million) and the accrued benefit liability is $23.0 million (2003 — $21.4 million).

8. Reserves

The accumulated deficit of $9,296.0 million consists of an unallocated deficit component of $9,307.9 million and the Environmental Protection Reserve of $11.9 million. The Environmental Protection Reserve was created to provide contingency funding to mitigate unforeseen environmental problems related to uranium milling. The reserve is maintained at its March 31, 1992 balance.

9. Debt Charges

	(thousands of dollars)
	2004			2003
Total interest costs	$	1,185,969		$	1,147,426
Interest reimbursed from government business enterprises		(267,027	)		(269,487	)
Net foreign exchange loss		3,660			9,771
Other costs		5,231			6,679
Total Debt Charges	$	927,833		$	894,389


56		Public Accounts, 2003-04

Government of Saskatchewan
Notes to the Summary Financial Statements

10. Expenditure by Object

	(thousands of dollars)
	2004		2003
Transfers	$	2,796,023	$	2,630,166
Salaries and benefits		2,282,391		2,131,202
Operating costs		1,001,119		1,012,013
Debt charges		927,833		894,389
Tangible capital asset acquisitions		303,898		318,131
Other		436,095		1,143,589
Total Expenditure	$	7,747,359	$	8,129,490

11. Comparison of Planned to Actual Results

			(thousands of dollars)
	2004					2003
	Planned		Actual			Actual
Surplus of the General Revenue Fund	$	134	$	983		$	860
Surplus (Deficit) of other government service organizations				12,496			(105,871	)
Adjustment to conform to the basis of accounting described in note 1(c)				(3,888	)		(171,853	)
Dividends received from government organizations				(890,452	)		(829,545	)
Deficit from government service organizations				(880,861	)		(1,106,409	)
Income from government business enterprises				734,016			452,755
Deficit			$	(146,845	)	$	(653,654	)

The planned and actual figures are before elimination of inter-organization transactions.

12. Contingencies

Guaranteed debt

Debt of $273.0 million (2003 — $319.9 million) is guaranteed by the Government. Schedule 11 provides a listing of guaranteed debt.

Lawsuits

Up to $104.9 million may be paid depending on the outcome of lawsuits in progress.

Indian and Northern Affairs Canada

The Government pays for certain social services provided to status Indians and submits claims to the federal government for the cost of these services. The Government believes these costs are the responsibility of the federal government and that these costs are fully reimbursable. However, the federal government denies responsibility for a portion of these costs.

The Government is unable to determine whether the outstanding amounts will be reimbursed. The Government will account for any recovery resulting from the resolution of this contingency at the time of settlement. No provision for such a recovery has been made in these financial statements.

13. Commitments

Significant financial commitments include:

forward purchase commitments of $1,744.8 million for coal contracted for future minimum deliveries valued at current prices, and approximately $4,800 million for power over the next 24 years;
treaty land entitlement agreement commitments valued at approximately $29.5 million;
other commitments of $507.3 million which include commitments of $18.9 million for agriculture, $20.1 million for community development, $68.8 million for economic development, $41.2 million for education, $42.4 million for environment, $38.1 million for health, $109.9 million for social services and assistance, and $63.7 million for transportation; and


Summary Financial Statements		57

Government of Saskatchewan
Notes to the Summary Financial Statements

operating and capital lease obligations as follows:

	(thousands of dollars)
	Operating		Capital
Future minimum lease payments
2004-05	$	87,606	$	22,266
2005-06		81,907		20,270
2006-07		72,937		17,114
2007-08		51,579		13,807
2008-09		43,353		13,424
Thereafter		17,895		59,079
		355,277		145,960
Interest and executory costs		--		(69,673	)
Total Lease Obligations	$	355,277	$	76,287

Total operating lease obligations include $173.0 million for government service organizations and $182.3 million for government business enterprises.

Total capital lease obligations include $59.7 million for government service organizations (schedule 6) and $16.6 million for government business enterprises.

14. Trust Funds

Trust funds are property held and administered on behalf of beneficiaries. Trust assets are administered but not owned by the Government. Therefore, trust funds are not included in the reporting entity.

Fund balances held and administered by the Government at March 31, 2004, are as follows:

	(thousands of dollars)
	2004		2003
Pension plans¹	$	8,277,428	$	7,470,428
Public Guardian and Trustee of Saskatchewan		136,396		121,788
Other		8,998		36,371
Total Trust Funds	$	8,422,822	$	7,628,587

¹ The balance reflects the latest financial statements of the funds closest to March 31, 2004.

15. Adjustment to Accumulated Deficit

During 2003-04, the government changed its accounting treatment for transfers under the Net Income Stabilization Account (NISA) resulting in a $46.1 million reduction in agriculture expenditure and a corresponding increase in the opening accumulated deficit.

During 2003-04, a government business enterprise adopted new standards of accounting for asset retirement obligations recommended by the Canadian Institute of Chartered Accountants. As a result, the Government recorded an increase in investment in government enterprises of $180.8 million and a corresponding decrease in the accumulated deficit. The comparative figures have not been restated. The effect of this change in accounting policy in the current year is an increase in income from government business enterprises of $10.0 million.

During 2002-03, a government business partnership adopted the asset and liability method of accounting for income taxes as recommended by the CICA. As a result, in 2002-03, the Government recorded an increase in other investments of $77.8 million and a corresponding decrease in the accumulated deficit.

16. Comparative Figures

Certain of the 2003 comparative figures have been reclassified to conform with the current year’s presentation.


58		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

For the Year Ended March 31, 2004

Schedule 1 — Accounts Receivable

	(thousands of dollars)
	2004			2003
Taxation	$	180,391		$	155,407
Non-renewable resources		107,265			137,522
Other own-source revenue		549,503			480,160
Transfers from the federal government		93,636			154,333
		930,795			927,422
Provision for loss		(80,795	)		(81,773	)
Total Accounts Receivable	$	850,000		$	845,649

Schedule 2 — Loans and Mortgages Receivable

	(thousands of dollars)
	2004			2003 (Restated)
Student loans	$	99,444		$	59,602
Agricultural loans		68,636			74,169
Other loans		57,667			58,292
Mortgages		3,870			4,190
		229,617			196,253
Provision for loss		(82,126	)		(66,611	)
Total Loans and Mortgages Receivable	$	147,491		$	129,642

See page 59 for additional information.


Summary Financial Statements		59

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 2 (continued) — Loans and Mortgages Receivable

Student Loans

The program operates under the authority of The Student Assistance and Student Aid Fund Act, 1985. Loans are interest-free until the discontinuance of full-time studies or graduation. Interest rates are prescribed by the Minister of Learning. Special incentive loan remission grants, student bursaries, scholarships, study grants and other varieties of loan forgiveness are available to students who meet specific criteria.

A Risk Sharing Student Loans Agreement between the Government and a bank was signed in March 1996. This Agreement covers loans approved between August 1, 1996 and July 31, 2001. The Government retained responsibility for loan approval. Loans approved are lender-financed, disbursed, managed and collected by the bank. The Government pays a risk premium of 5.0 per cent to the bank when loans become repayable.

In June 2001, the Government entered into an agreement with the federal government to integrate the federal and provincial student loans programs. This agreement is effective for loans approved on or after August 1, 2001 and establishes the Government as financier of the program. The Government approves applications for both provincial and federal loans. Disbursement, administration and collection of loans is contracted to external agencies.

A loss provision of $42.3 million (2003 — $19.5 million) has been recorded on these loans.

Agricultural Loans

Capital loan program

The Government holds $42.7 million (2003 — $51.5 million) in loans under the Capital loan program. These loans are repayable over terms not exceeding twenty-five years and bear interest at rates between 5.0 per cent and 13.5 per cent (2003 — 5.0 and 13.5 per cent). Security on individual loans varies and may include mortgages on real property, security agreements and guarantees. The program operates under The Agricultural Credit Corporation of Saskatchewan Act. A loss provision of $11.8 million (2003 — $17.1 million) has been recorded on these loans.

Other agricultural loans

The Government holds $25.9 million (2003 restated — $22.7 million) in loans under various other agricultural loan programs. The interest on these loans ranges from 5.0 to 10.5 per cent (2003 — 5.0 to 10.5 per cent). Generally, the loans are secured by promissory notes and, where applicable, by guarantees or general security arrangements. A loss provision of $9.7 million (2003 restated — $8.1 million) has been recorded on these loans.

Other Loans

The Government’s loan portfolio also consists of numerous other loans at various interest rates. Maturities on these loans extend to 2022. A loss provision of $17.5 million (2003 — $21.7 million) has been recorded on these loans.

Mortgages

Mortgages are repayable, at various interest rates, over terms not exceeding thirty-five years. Security on the mortgages may include promissory notes or charges against residential property. A loss provision of $0.9 million (2003 — $0.9 million) has been recorded on these mortgages.


60		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 3 — Investment in Government Business Enterprises

	SaskEnergy Incorporated Dec. 31, 2003
Assets
Cash and temporary investments
Due from government organizations	$							36,652
Other		(1,295	)	3,693		90,579		5,390		23,274
Accounts receivable
Due from government organizations				2,037
Other		144,524		154,810		92,833		25,656		214
Inventories		6,458		116,106		4,072		17,597		209
Prepaid expenses				7,002		10,381		3,364		641
Long-term investments
in the Government
Other		23,768		25,444		12,274
Capital assets		940,267		3,260,586		914,679		93,487		57,685
Other assets
Due from government organizations				5,000
Other		118,889		36,327		110,951		3,865
Total Assets		1,232,611		3,611,005		1,235,769		186,011		82,023
Liabilities
Accounts payable and accrued liabilities
Due to government organizations		13,541		51,780		9,711
Other		127,443		166,720		105,925		14,581		6,250
Dividends payable to government organizations		10,560		94,678		23,198		143,938		36,480
Debt
Owing to government organizations		768,066		1,704,438		391,191
Other		4,816		97,048		8,669				31,118
Unearned revenue
Received from government organizations
Other						31,904
Unpaid insurance claims
Other liabilities				112,757		9,033		27,427		8,175
Total Liabilities		924,426		2,227,421		579,631		185,946		82,023
Net Assets (Liabilities)	$	308,185		1,383,584		656,138		65		--
Revenue
From government organizations	$	19,249		17,705		49,196
Other		672,932		1,231,275		847,498		737,134		97,718
Total Revenue		692,181		1,248,980		896,694		737,134		97,718
Expenses
Paid and owing to government organizations		71,789		253,855		30,841
Other		579,367		807,897		765,001		376,375		61,238
Total Expenses³		651,156		1,061,752		795,842		376,375		61,238

Income (loss) before non-recurring items		41,025		187,228		100,852		360,759		36,480
Non-recurring items						(15,797	)
Net Income (Loss)		41,025		187,228		85,055		360,759		36,480
Retained earnings (deficit) - beginning of year		223,373		524,081		397,642		304		--
Effect of prior period adjustment				180,787				(232	)
Dividends to government organizations		(26,660	)	(168,505	)	(76,564	)	(360,766	)	(36,480	)
Retained earnings (deficit) - end of year		237,738		723,591		406,133		65		--
Equity advances from government organizations		71,531		659,993		250,000
Investment in Government Business Enterprises		309,269		1,383,584		656,133		65		--
Other equity⁴		(1,084	)			5

Net Assets (Deficiency)	$	308,185		1,383,584		656,138		65		--

See page 62 for additional information.

¹	Adjustments include:

—

reclassifying dividends paid by March 31, 2004;

—

reclassifying cross currency swaps of Saskatchewan Power Corporation; and

—

reversing the loss recognized by Municipal Financing Corporation for a premium paid to a government service organization on an exchange of debt.


Summary Financial Statements		61

															(thousands of dollars)
Municipal Financing Corporation of Saskatchewan Dec. 31, 2003		Saskatchewan Government Insurance Dec. 31, 2003			Saskatchewan Auto Fund Dec. 31, 2003		Workers' Compensation Board (Saskatchewan)² Dec. 31, 2003			Saskatchewan Government Growth Fund Management Corporation Dec. 31, 2003		Adjustments¹			Total 2004			Total 2003

															$	36,652		$	23,047
	2,621		42,351			82,912		25,711			729		(134,101	)		141,864			260,699

						4,653		8,959								15,649			118,056
	618		67,366			102,661		27,161			2,315					618,158			493,432
																144,442			137,316
			64,932			20,687										107,007			109,011

			6,624			13,659		7,562								27,845			44,186
	21,634		289,438			726,012		800,067			435					1,899,072			2,715,016
			9,967			39,924		20,051			2					5,336,648			4,321,182

																5,000			4,500
	46		1,661										7,594			279,333			299,198
	24,919		482,339			990,508		889,511			3,481		(126,507	)		8,611,670			8,525,643

			13,534			24,683		7,624								120,873			123,851
	305		17,489			13,340		22,524			213					474,790			463,986
			5,665										(134,101	)		180,418			127,257

	14,391												21,841			2,899,927			2,996,769
																141,651			136,283


			138,808			226,623										397,335			376,846
			211,128			711,510		801,777								1,724,415			1,650,138
			3,211					108,953					(21,841	)		247,715			457,636
	14,696		389,835			976,156		940,878			213		(134,101	)		6,187,124			6,332,766
	10,223		92,504			14,352		(51,367	)		3,268		7,594		$	2,424,546		$	2,192,877


						7,527		17,314							$	110,991		$	89,542
	1,556		260,580			533,744		208,253			3,618					4,594,308			4,279,888
	1,556		260,580			541,271		225,567			3,618		--			4,705,299			4,369,430

	1,496		10,254			38,934		7,624					684			415,477			428,207
	25		229,124			490,809		225,815			3,249		1,109			3,540,009			3,448,074
	1,521		239,378			529,743		233,439			3,249		1,793			3,955,486			3,876,281
	35		21,202			11,528		(7,872	)		369		(1,793	)		749,813			493,149
																(15,797	)		(40,394	)
	35		21,202			11,528		(7,872	)		369		(1,793	)		734,016			452,755
	10,188		30,084			2,824		(43,495	)		2,898		9,148			1,157,047			1,211,214
													232			180,787			--
			(13,782	)												(682,757	)		(506,922	)
	10,223		37,504			14,352		(51,367	)		3,267		7,587			1,389,093			1,157,047
			55,000								1		7			1,036,532			1,036,532
	10,223		92,504			14,352		(51,367	)		3,268		7,594			2,425,625			2,193,579
																(1,079	)		(702	)
	10,223		92,504			14,352		(51,367	)		3,268		7,594		$	2,424,546		$	2,192,877

²	Net assets are restricted as disclosed on page 62.

³	Total expenses include debt charges, net of sinking fund earnings, of $228.3 million (2003 — $239.3 million). Interest in the amount of $221.6 million (2003 — $246.8 million) was paid to government organizations.

⁴	Other equity consists of unrealized gains (losses) on translation of self-sustaining foreign operations.


62		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 3 (continued) — Investment in Government Business Enterprises

SaskEnergy Incorporated (SaskEnergy)

SaskEnergy promotes, transports, stores and distributes natural gas in Saskatchewan.

Saskatchewan Power Corporation (SaskPower)

SaskPower generates, purchases, transmits, distributes and sells electricity and related products and services.

Saskatchewan Telecommunications Holding Corporation (SaskTel)

SaskTel markets and supplies a range of voice, data, internet, wireless, text, image and entertainment products, systems and services. Through interconnection agreements, SaskTel is part of the national and global communications network.

Liquor and Gaming Authority (SLGA)

SLGA’s main functions are to control the manufacture and distribution of beverage alcohol throughout the Province, to oversee the licencing of all establishments selling alcohol in the Province and to maintain the integrity of all licenced gaming while ensuring maximum benefit to Saskatchewan charities.

Saskatchewan Gaming Corporation (SGC)

SGC manages and operates Casino Regina and Casino Moose Jaw.

Municipal Financing Corporation of Saskatchewan (MFC)

MFC’s objective is to assist municipalities in financing their capital requirements.

Saskatchewan Government Insurance (SGI) & Saskatchewan Auto Fund (Auto Fund)

SGI’s competitive general insurance business, SGI CANADA, offers a comprehensive line of home, tenant, farm, automobile extension and commercial coverages.

The Auto Fund, the provincial compulsory vehicle insurance program, is administered by SGI on behalf of the Government. Any net assets of the Auto Fund are held on behalf of Saskatchewan’s motoring public and are not used for the payment of dividends to the General Revenue Fund.

Workers’ Compensation Board (Saskatchewan) (WCB)

WCB provides workers’ compensation insurance to Saskatchewan workers and employers. Any net assets of the WCB cannot be used for the payment of dividends to the General Revenue Fund.

Saskatchewan Government Growth Fund Management Corporation (SGGF)

SGGF participates in the federal government’s Immigrant Investor Program to acquire lower cost capital for commercial investment in Saskatchewan. Investment funds are raised through eight subsidiary fund companies and are managed by Crown Capital Partners Inc., a fund manager.

In March 1999, the Immigrant Investor Program ended. However, with a significant number of subscribers yet to complete their subscription requirements, the funds will require management by SGGF for at least the next six years.


Summary Financial Statements		63

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 4 — Other Investments

	(thousands of dollars)
	2004		2003 (Restated)
Equity Investments
Government Business Partnerships	$	93,625	$	81,438
Saskferco Products Inc.		120,188		116,055
Meadow Lake OSB Limited Partnership		30,614		27,478
Other		32,129		40,963
		276,556		265,934

Portfolio Investments
HARO Financial Corporation		68,000		68,000
Other		36,351		35,457
		104,351		103,457


Bonds, Debentures and Other Advances
HARO Financial Corporation		115,649		139,029
Meadow Lake Pulp Limited Partnership		158,360		158,361
Other		51,437		49,915
		325,446		347,305


Property Holdings		6,122		5,509
Total Other Investments	$	712,475	$	722,205

See pages 64-66 for additional information.


64		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 4 (continued) — Other Investments

Government Business Partnerships

The Government has invested in government business partnerships to promote economic growth and provide an economic return. At March 31, 2004, the Government’s investment in government business partnerships includes:

a 50 per cent interest in NewGrade Energy Inc., which operates a heavy oil upgrading plant in Regina;
a 35 per cent interest in Centennial Foods Partnership, a value-added food manufacturing and distribution business in Saskatoon;
a 33.3 per cent interest in Foragen Technologies Limited Partnership, a venture capital fund which provides seed capital to technology corporations;
a 50 per cent interest in each of Hypor B.V. and Hypor LP, which carry on the business of research, development, production, marketing and sale of pigs, and swine genetic material; and
a 50 per cent interest in Meadow Lake Pulp Limited Partnership, which operates a pulp mill near Meadow Lake.

	(thousands of dollars)
Condensed Financial Information for Government Business Partnerships	2004			2003
Assets
Capital assets	$	249,351		$	256,826
Other		410,345			406,371
Total Assets		659,696			663,197
Liabilities
Debt
Owing to government organizations		664,667			599,357
Other		177,698			212,585
Other		137,919			160,669
Total Liabilities		980,284			972,611
Net Liabilities	$	(320,588	)	$	(309,414	)
Operating Results
Revenue	$	1,314,043		$	1,317,848
Expenses		1,339,753			1,351,710
Net Operating Results		(25,710	)		(33,862	)
Net Operating Deficiency - beginning of year		(489,001	)		(528,318	)
Effect of prior period adjustment		5,645			73,178
Net Operating Deficiency - end of year		(509,066	)		(489,002	)
Equity advances/share capital (net of partnership distributions)		188,478			179,588
Net Deficiency	$	(320,588	)	$	(309,414	)

Investment in Government Business Partnerships
Government's share of Net Operating Deficiency - end of year	$	(253,027	)	$	(243,063	)
Government's investment¹		100,832			93,324
Adjustments²		245,820			231,177
Total Investment in Government Business Partnerships³	$	93,625		$	81,438

¹	Government’s investment includes the Government’s initial investment net of partnership distributions as well as subsequent cash injections provided under various terms and conditions.
²	Adjustments include:
	- elimination of expenditures included in the Government’s share of accumulated operating deficiency above and also consolidated as part of the operations of government service organizations;
	- additional operating expenditures incurred by the Government's subsidiaries through which the Government has made these investments; and
	- certain valuation and amortization adjustments.
³	Total investment in government business partnerships consists of:

	(thousands of dollars)
	2004			2003
NewGrade Energy Inc	$	109,057		$	109,553
Centennial Foods Partnership		18,238			17,984
Foragen Technologies Limited Partnership		6,556			4,144
Hypor B.V		4,739			--
Hypor LP		4,165			--
Meadow Lake Pulp Limited Partnership		(49,130	)		(50,243	)
	$	93,625		$	81,438


Summary Financial Statements		65

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 4 (continued) — Other Investments

Saskferco Products Inc. (Saskferco)

The Government holds a 49 per cent voting interest in Saskferco, a nitrogen fertilizer plant in Belle Plaine.

Meadow Lake OSB Limited Partnership (ML OSB)

The Government is a limited partner in ML OSB, an oriented strand board facility near Meadow Lake. The Government holds 27.5 million partnership units (2003 — 23.8 million) representing a 25 per cent (2003 — 25 per cent) interest in ML OSB. The Government has issued options to purchase its units of ML OSB, which, if exercised, would reduce the Government’s interest to 6.8 per cent.

HARO Financial Corporation (HARO)

In 1992, the Government entered into a Term Loan agreement with HARO. The loan was for an initial five-year term with a maximum of four five-year renewal terms at the option of HARO. In 2002, the Government agreed to renew this loan for a third five-year term. Annual interest rates on the loan are fixed at the start of each renewal term. For the third five-year term, the interest rate on the loan is 5.5 per cent compounded annually.

Security for the loan is 100 per cent of HARO’s assets, which consist primarily of HARO’s 65.2 per cent interest in Crown Life Insurance Company (Crown Life) shares.

Payment of principal and interest is subject to available cash flow as defined in the loan agreement. Due to collection uncertainty, the Government will record interest income when payments are received. The total interest deferred and owing to the Government at March 31, 2004 is $197.5 million (2003 — $185.7 million).

All unpaid principal and interest is due on December 15, 2017. On that date, any amounts outstanding will convert to 100 per cent of HARO equity shares. The Government has a unilateral right, prior to December 15, 2017, to convert no less than 25 per cent of the loan to either HARO non-voting, HARO voting or Crown Life shares. Any conversion may be subject to regulatory approval.

The Government owns 68 million HARO Class B non-voting common shares, which entitle the Government to a maximum of 100 per cent of participation rights with respect to dividends and remaining property of HARO on its liquidation or dissolution. Subject to regulatory approval, the Government has a unilateral right to exchange at any time the Class B shares for voting shares or HARO’s assets.

Meadow Lake Pulp Limited Partnership (MLPLP)

In addition to its equity interest in MLPLP, the Government has also provided the following loans:

Participating Debenture of $99.0 million (2003 — $99.0 million) bearing interest at 11.15 per cent calculated on October 31 of each year;
Term Loan of $20.0 million (2003 — $20.0 million) bearing interest at prime plus 2.0 per cent, which is 6.0 per cent at March 31, 2004 (2003 — 6.75 per cent). Any interest outstanding and not paid on October 31 of each year is added to the principal balance;
Contingency Loan of $10.9 million (2003 — $10.9 million) bearing interest at prime plus 1.0 per cent, which is 5.0 per cent at March 31, 2004 (2003 — 5.75 per cent). Any interest outstanding and not paid on October 31 of each year is added to the principal balance;
Guarantee Advance of $8.0 million (2003 — $8.0 million) bearing interest at prime plus 1.0 per cent, which is 5.0 per cent at March 31, 2004 (2003 — 5.75 per cent). Any interest outstanding and not paid on October 31 of each year is added to the principal balance;
Cash Flow Loan of $10.5 million (2003 — $10.5 million) bearing interest at prime plus 1.0 per cent, which is 5.0 per cent at March 31, 2004 (2003 — 5.75 per cent). Any interest outstanding and not paid on October 31 of each year is added to the principal balance; and
Guarantee Loan of $10.0 million (2003 — $10.0 million) bearing interest at prime plus 1.0 per cent, which is 5.0 per cent at March 31, 2004 (2003 – 5.75 per cent). Any interest outstanding and not paid on October 31 of each year is added to the principal balance.

The Government records, as a separate loan (Interest Loan), the accrued interest receivable from the Participating Debenture. Interest on the Interest Loan, at 11.15 per cent, is calculated on October 31 of each year and is added to the principal balance outstanding on the loan. Interest income earned and forming part of the Interest Loan is recorded as deferred interest income due to the uncertainty of collection. The deferred interest income will be recorded as income when payments are received. The total deferred interest is $446.3 million (2003 — $383.0 million).


66		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 4 (continued) — Other Investments

Any payments to be made on the Participating Debenture, Contingency Loan, Guarantee Advance, Cash Flow Loan, Guarantee Loan and the Interest Loan are subject to available cash flows as defined in the loan agreements. Payments towards principal outstanding on the Term Loan are due in two equal instalments after MLPLP has fully repaid an external bank loan. The Participating Debenture, Term Loan, Contingency Loan and Interest Loan mature in 2014. The remaining balance outstanding on the Participating Debenture and Interest Loan on October 31, 2014 shall bear interest at a rate equal to the Government’s short-term cost of borrowing, which at March 31, 2004 is 2.11 per cent (2003 — 3.24 per cent), until paid in full.

Due to the uncertainty of cash flows from MLPLP, the Government’s Participating Debenture is shown net of a loss provision of $60.0 million (2003 — $60.0 million).


Summary Financial Statements		67

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 5 — Accounts Payable and Accrued Liabilities

	(thousands of dollars)
	2004		2003
Transfers
Federal government	$	131,550	$	94,032
Other		178,007		223,417
Accrued salaries and benefits		301,968		289,979
Supplier payments		205,093		213,318
Accrued interest		172,676		166,715
Other		362,627		284,001
Total Accounts Payable and Accrued Liabilities	$	1,351,921	$	1,271,462

Schedule 6 — Other Liabilities

	(thousands of dollars)
	2004		2003 (Restated)
Funds held on behalf of government business enterprises and others
Liquor and Gaming Authority	$	39,181	$	17,932
Court of Queen's Bench		10,559		10,486
Other		30,560		33,389
Capital lease obligations (note 13)		59,747		61,637
Other		40,936		30,980
Total Other Liabilities	$	180,983	$	154,424

Schedule 7 — Unearned Revenue

	(thousands of dollars)
	2004		2003 (Restated)
Housing contributions	$	109,296	$	87,108
Motor vehicle licencing fees		28,525		29,998
Health contributions		27,375		35,590
Crown mineral leases		17,109		16,305
Other		34,661		46,076
Total Unearned Revenue	$	216,966	$	215,077


68		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 8 — Public Debt

						(thousands of dollars)
	2004							2003
	Gross Public Debt		Sinking Funds³			Public Debt		Public Debt
Government Service Organizations
General Revenue Fund¹	$	8,768,059	$	(736,422	)	$	8,031,637	$	7,821,426
Saskatchewan Opportunities Corporation		156,968		(4,988	)		151,980		141,974
Regional Health Authorities		124,110		--			124,110		118,151
Saskatchewan Housing Corporation		98,598		(3,055	)		95,543		114,007
Saskatchewan Crop Insurance Corporation		177,000		--			177,000		113,000
Information Services Corporation of Saskatchewan		60,880		--			60,880		64,606
Saskatchewan Water Corporation		57,579		(4,347	)		53,232		49,495
Education Infrastructure Financing Corporation		--		--			--		38,224
Agricultural Credit Corporation of Saskatchewan		9,100		--			9,100		23,617
Investment Saskatchewan Inc.		20,919		(5,675	)		15,244		15,476
Other		6,418		(1,409	)		5,009		5,597
Debt of Government Service Organizations		9,479,631		(755,896	)		8,723,735		8,505,573
Government Business Enterprises
Saskatchewan Power Corporation		1,943,082		(119,755	)		1,823,327		1,864,355
SaskEnergy Incorporated		799,003		(26,121	)		772,882		791,796
Saskatchewan Telecommunications Holding Corporation		434,249		(34,389	)		399,860		428,428
Saskatchewan Gaming Corporation		31,118		--			31,118		33,398
Municipal Financing Corporation of Saskatchewan		14,391		--			14,391		15,075
		3,221,843		(180,265	)		3,041,578		3,133,052
Net change to March 31		186,399		(11,375	)		175,024		71,991
Debt of Government Business Enterprises²		3,408,242		(191,640	)		3,216,602		3,205,043
Total Public Debt⁴	$	12,887,873	$	(947,536	)	$	11,940,337	$	11,710,616

Debt repayable in foreign currency has been restated in Canadian dollar equivalents.

¹	General Revenue Fund debt is shown net of $3,060.8 million (2003 — $3,077.9 million) reimbursable from government business enterprises and $551.5 million (2003 — $548.9 million) reimbursable from government service organizations.

²	The debt of government business enterprises is as presented in their audited financial statements closest to March 31, 2004, as disclosed on schedule 3. The balance is adjusted for the net change to March 31, 2004.

³	See schedule 9 for information on sinking funds.

⁴	See schedule 10 for information on public debt by maturity.


Summary Financial Statements		69

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 9 — Sinking Funds

												(thousands of dollars)
	2003		2004
	Sinking Funds		Contributions			Earnings			Redemptions			Currency Adjustment			Sinking Funds
Government Service Organizations
General Revenue Fund	$	690,949	$	58,816		$	46,868		$	(30,234	)	$	(29,977	)	$	736,422
Investment Saskatchewan Inc.¹		5,443		--			232			--			--			5,675
Saskatchewan Water Corporation		3,771		302			274			--			--			4,347
Saskatchewan Opportunities Corporation		3,826		850			312			--			--			4,988
Saskatchewan Housing Corporation		2,286		585			184			--			--			3,055
Saskatchewan Property Management Corporation		679		674			56			--			--			1,409
Sinking Funds of Government Service Organizations		706,954		61,227			47,926			(30,234	)		(29,977	)		755,896
Government Business Enterprises
Saskatchewan Power Corporation		120,976		14,925			8,340			(10,245	)		(14,240	)		119,756
Saskatchewan Telecommunications Holding
Corporation		34,452		2,952			2,547			--			(5,563	)		34,388
SaskEnergy Incorporated		20,408		4,540			1,173			--			--			26,121
		175,836		22,417			12,060			(10,245	)		(19,803	)		180,265
Net Change to March 31		3,379		(220	)		(265	)		(284	)		8,765			11,375
Sinking Funds of Government Business Enterprises		179,215		22,197			11,795			(10,529	)		(11,038	)		191,640
Total Sinking Funds	$	886,169	$	83,424		$	59,721		$	(40,763	)	$	(41,015	)	$	947,536

¹	Sinking fund transferred from Crown Investments Corporation of Saskatchewan (non-consolidated), effective October 1, 2003.

The market value of sinking funds, at March 31, 2004, is $1,010.8 million (2003 — $934.9 million).
Sinking fund earnings include gains on investment sales of $12.5 million (2003 — $22.3 million).
Annual contributions, when established by Order in Council, are set at not less than 1 per cent of debentures outstanding. The redemption value is based on the market value of the sinking fund units at the date of redemption.

The aggregate amount of contributions estimated to be required in each of the next five fiscal years to meet sinking fund requirements are:

							(thousands of dollars)
	Government Service Organizations				Government Business Enterprises
	Canadian Dollar Debt		U.S. Dollar Debt (CDN $)		Canadian Dollar Debt		U.S. Dollar Debt (CDN $)		Total (CDN $)
2004-05	$	55,926	$	8,440	$	15,640	$	8,767	$	88,773
2005-06		47,434		8,440		15,495		8,767		80,136
2006-07		45,184		8,440		14,745		8,767		77,136
2007-08		43,184		8,440		14,745		8,767		75,136
2008-09		43,184		8,440		14,446		6,224		72,294
	$	234,912	$	42,200	$	75,071	$	41,292	$	393,475

Sinking fund assets have been invested as follows:	(thousands of dollars)
	2004		2003
Long-term Investments
Other provincial governments' securities; coupon interest range 4.8% to 9.5%; maturing in 5.7 to 35.3 years	$	397,949	$	344,190
Government of Saskatchewan securities; coupon interest range 4.9% to 10.3%; maturing in 4.0 to 29.4 years		323,003		280,970
Government of the United States securities; coupon interest range 5.4% to 9.3%; maturing in 12.1 to 26.9 years		54,996		44,664
Government of Canada securities; coupon interest range 5.1% to 8.0%; maturing in 3.5 to 25.2 years		36,643		110,008
Cash, short-term investments and accrued interest		134,945		106,337
Total Sinking Funds	$	947,536	$	886,169

Short-term investments include $16.0 million (2003 — $16.0 million) in Government of Saskatchewan securities.

Cash, short-term investments and accrued interest are disclosed net of $1.6 million (2003 — $1.8 million) in liabilities.

Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $359.8 million Canadian (2003 — $371.0 million) at the exchange rate in effect at March 31, 2004 of 1.3105 (2003 — 1.4693).


70		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 10 — Public Debt by Maturity

													(thousands of dollars)
	2004												2003
Year of Maturity	Canadian Dollar Debt			U.S. Dollar Debt (CDN $)			Total (CDN $)			Average Coupon Rate			Total (CDN$)			Average Coupon Rate
Government Service Organizations
Short-term promissory notes	$	187,500		$	--		$	187,500			2.07	%	$	315,793			2.87	%
2003-04		--			--			--			--			398,541			7.15	%
2004-05		1,162,850			--			1,162,850			8.37	%		1,116,547			8.52	%
2005-06		762,062			--			762,062			6.21	%		764,384			6.21	%
2006-07		1,126,791			--			1,126,791			5.85	%		1,127,744			5.85	%
2007-08		464,682			--			464,682			5.06	%		466,003			5.06	%
2008-09		620,131			--			620,131			4.85	%		--
1-5 years		4,324,016			--			4,324,016						4,189,012
6-10 years		2,856,410			331,109			3,187,519			7.08	%		2,836,898			7.24	%
11-15 years		619,609			--			619,609			10.04	%		964,797			9.06	%
16-20 years		184,287			524,200			708,487			8.34	%		731,820			8.55	%
21-25 years		250,000			--			250,000			5.75	%		--
26-30 years		340,000			--			340,000			6.13	%		440,000			6.03	%
Thereafter		50,000			--			50,000			5.70	%		50,000			5.70	%
		8,624,322			855,309			9,479,631						9,212,527
Sinking funds		(494,495	)		(261,401	)		(755,896	)					(706,954	)
Debt of Government Service
Organizations		8,129,827			593,908			8,723,735						8,505,573
Government Business Enterprises
Short-term promissory notes		47,500			--			47,500			2.07	%		81,707			2.87	%
2003-04		--			--			--			--			168,175			9.39	%
2004-05		209,218			--			209,218			11.41	%		209,819			11.40	%
2005-06		252,784			--			252,784			8.67	%		252,836			8.67	%
2006-07		129,513			--			129,513			9.50	%		129,570			9.52	%
2007-08		371,715			64,215			435,930			7.79	%		448,648			7.76	%
2008-09		121,930			--			121,930			8.97	%		--
1-5 years		1,132,660			64,215			1,196,875						1,290,755
6-10 years		368,887			32,763			401,650			6.77	%		410,686			7.37	%
11-15 years		30,903			--			30,903			6.18	%		139,571			7.37	%
16-20 years		401,069			425,912			826,981			8.93	%		887,754			8.99	%
21-25 years		418,067			(131,050	)		287,017			7.82	%		190,676			8.66	%
26-30 years		660,000			--			660,000			6.13	%		460,000			6.26	%
Thereafter		4,816			--			4,816			13.50	%		4,816			13.50	%
		3,016,402			391,840			3,408,242						3,384,258
Sinking funds		(93,237	)		(98,403	)		(191,640	)					(179,215	)
Debt of Government Business
Enterprises		2,923,165			293,437			3,216,602						3,205,043
Total Public Debt	$	11,052,992		$	887,345		$	11,940,337					$	11,710,616

See page 71 for additional information.


Summary Financial Statements		71

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 10 (continued) — Public Debt by Maturity

The average effective interest rate on total public debt during 2003-04 was 6.20 per cent (2002-03 — 7.23 per cent) and includes the impact of foreign exchange and the amortization of any premiums or discounts associated with the debentures. The average term to maturity of total public debt outstanding at March 31, 2004 is 9.0 years (2003 — 8.4 years).

Total public debt includes Canada Pension Plan debentures of $1,081.6 million (2003 — $1,150.7 million). These debentures are callable in whole or in part before maturity, on 30 days prior notice, at the option of the Minister of Finance of Saskatchewan.

Total public debt includes debentures of $440.0 million (2003 — $390.0 million) that provide the holder with a choice of dates on which the debt matures. The year of maturity reflects the earliest possible date of maturity rather than the maximum term to maturity.

Sensitivity of Debt and Debt Charges

U.S. dollar debentures have been converted to Canadian dollars at the exchange rate in effect at March 31, 2004 of 1.3105 (2003 — 1.4693), except for 194.0 million U.S. dollars converted at the cross currency swaption rate of 1.3690. A one cent change in the value of the U.S. dollar compared to the Canadian dollar from the March 31, 2004 level would change debt charges by $1.2 million in 2004-05 and debt by $8.2 million.

Debt of government service organizations includes floating rate debt of $2,058.5 million (2003 — $1,445.1 million). Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. A one percentage point increase in interest rates would increase debt charges by $20.6 million in 2004-05.

Derivative Financial Instruments

Cross Currency Swaps

The following foreign-denominated items have been hedged to Canadian dollars using cross currency swaps:

debentures totalling 10.0 billion yen (2003 — 12.5 billion) fully hedged to $130.8 million Canadian (2003 — $161.8 million);
debentures totalling 1,151.0 million U.S. dollars (2003 - 862.0 million) fully hedged to $1,588.7 million Canadian (2003 - $1,192.4 million); and
interest payments on debentures of 50.0 million U.S. dollars (2003 — 0) hedged to Canadian dollars at an exchange rate of 1.3010.

In total, the Government has cross currency swaps on a notional value of debt of $1,915.4 million (2003 — $1,516.1 million). The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.

Cross Currency Swaptions

U.S. dollar debt includes 194.0 million U.S. dollars (2003 — 0) that may be converted to $265.6 Canadian (2003 — $0) at the option of third parties. These options expire on July 15, 2004 and August 1, 2004.

Interest Rate Swaps and Forward Rate Agreements

The Government has interest rate swaps on a notional value of debt of $851.3 million (2003 — $843.1 million) and forward rate agreements on a notional value of debt of $125.0 million (2003 — $125.0 million).

Foreign Currency Forward Exchange Contracts

The Government has forward purchase commitments to acquire 4.7 million U.S. dollars (2003 — 43.9 million) at a cost of $6.2 million Canadian (2003 — $66.6 million).


72		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 11 — Guaranteed Debt

	(thousands of dollars)
	2004		2003
The Crown Corporations Act, 1993
Meadow Lake Pulp Limited Partnership	$	60,000	$	70,000
NewGrade Energy Inc.		32,217		45,100
Meadow Lake OSB Limited Partnership		21,181		4,875
The Newgrade Energy Inc. Act
NewGrade Energy Inc.		42,175		59,045
The Industry and Commerce Development Act
Saskferco Products Inc.		36,088		66,440
The Agricultural Credit Corporation of Saskatchewan Act
BSE Livestock Loan Guarantee Program		30,005		--
The Farm Financial Stability Act
Breeder associations		17,901		16,831
Feeder associations		11,219		10,431
The Power Corporation Act
Luscar Ltd.		--		21,785
Other		22,193		25,404
Total Guaranteed Debt	$	272,979	$	319,911

Total guaranteed debt is net of a loss provision of $8.6 million (2003 — $3.6 million).
In addition to the amount shown, there is a contingent liability for interest accrued on these items.

See page 73 for additional information.


Summary Financial Statements		73

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 11 (continued) — Guaranteed Debt

Meadow Lake Pulp Limited Partnership (MLPLP)

The Government has guaranteed certain debentures issued by MLPLP to a maximum of $62 million. The debentures are due in 2006.

NewGrade Energy Inc. (NewGrade)

The Government has guaranteed certain long-term debt of NewGrade to a maximum of $360 million. A significant portion of this guarantee relates to U.S. denominated debt. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar.

The Government has also indemnified the Government of Canada for its guarantee of NewGrade’s long-term debt, to a maximum of $275 million.

Meadow Lake OSB Limited Partnership (ML OSB)

The Government has guaranteed certain loans of ML OSB to a maximum of $27.5 million. The loans are due in 2006.

Saskferco Products Inc. (Saskferco)

The Government has guaranteed certain medium-term notes issued by Saskferco. This guarantee pertains to debt denominated in U.S. dollars. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar. The amount recorded is net of $105.4 million (2003 — $123.1 million) for Saskferco’s equity in a sinking fund.

BSE Livestock Loan Guarantee Program

The Government has guaranteed certain loans of livestock producers affected by export market restrictions on cattle. The loans are due in 2008.

Breeder and Feeder Associations

The Government provides guarantees to lenders who make loans to production associations. The Government guarantees repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million under both the breeder and feeder options. Guarantees for each bison association are limited to $5 million under the feeder option. Guarantees for each sheep association are limited to $4 million under both the breeder and feeder options.

Luscar Ltd.

The Government guaranteed a $45 million promissory note issued by Luscar Ltd. For 2003, the amount recorded is net of equity in a sinking fund administered by the Minister of Finance. Luscar Ltd. repaid its promissory note in May 2003, extinguishing the guarantee.


74		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 12 —Revenue

	(thousands of dollars)
	2004			2003
Taxation
Individual income	$	1,245,763		$	1,429,757
Sales		854,480			813,932
Corporation capital		371,479			379,093
Fuel		356,773			331,512
Corporation income		310,573			178,267
Tobacco		176,747			158,472
Other		83,019			78,208
Total Taxation		3,398,834			3,369,241
Non-renewable Resources
Oil		774,488			862,318
Potash		120,179			175,061
Natural gas		210,455			152,728
Other		35,840			53,542
Total Non-renewable Resources		1,140,962			1,243,649
Other Own-source Revenue
Fees
Motor vehicle licencing		119,412			116,964
Health care		122,281			120,354
Subsidized housing rental		77,844			76,098
Other		231,249			203,257
Investment income
Interest and dividends		103,168			92,980
Earnings from equity investments		14,557			16,384
(Loss) gain on sale of other investments		(631	)		3,418
Insurance		142,603			102,269
Other		247,244			264,613
Total Other Own-source Revenue		1,057,727			996,337
Total Own-source Revenue		5,597,523			5,609,227
Transfers from the Federal Government
Canada Health and Social Transfer		750,558			668,211
Crop insurance contributions		126,017			536,619
Housing subsidy		50,602			46,535
Equalization		41,284			(9,215	)
Other		300,514			171,704
Total Transfers from the Federal Government		1,268,975			1,413,854
Total Revenue	$	6,866,498		$	7,023,081


Summary Financial Statements		75

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 13 — Gains and Losses on Other Investments

	(thousands of dollars)
	2004			2003
Earnings (Losses) from Equity Investments
NewGrade Energy Inc.¹		7,155			16,792
Saskferco Products Inc.		6,197			6,751
Meadow Lake OSB Limited Partnership		2,968			--
Meadow Lake Pulp Limited Partnership		870			(2,325	)
Centennial Foods Partnership		365			(1,365	)
Hypor B.V		(51	)		--
Foragen Technologies Limited Partnership		(588	)		(654	)
Hypor LP		(2,295	)		--
Other		(64	)		(2,815	)
Net Earnings from Equity Investments		14,557			16,384
(Loss) Gain on Sale of Other Investments		(631	)		3,418
Provision for Loss		(3,352	)		(9,077	)
Net Gain on Other Investments	$	10,574		$	10,725

¹ Net of purchase premium amortization of $15 million.

Schedule 14 — Net Change in Non-cash Operating Activities

	(thousands of dollars)
	2004			2003
(Increase) decrease in prepaid expenditures	$	(120	)	$	5,663
Increase in accounts receivable		(4,351	)		(137,494	)
Decrease in inventories held for resale		1,100			3,261
Decrease (increase) in deferred charges		652			(3,626	)
Increase in accounts payable and accrued liabilities		80,459			233,727
Increase (decrease) in unearned revenue		1,889			(10,073	)
Net Change in Non-cash Operating Activities	$	79,629		$	91,458


76		Public Accounts, 2003-04

Government of Saskatchewan
Schedules to the Summary Financial Statements

Schedule 15 — Reporting Entity

Government Service Organizations (Consolidated)


Agricultural Credit Corporation of Saskatchewan Agricultural Implements Board Agri-Food Innovation Fund Board of Governors, Uranium City Hospital Cattle Marketing Deductions Fund Commercial Revolving Fund Community Initiatives Fund Correctional Facilities Industries Revolving Fund Crop Reinsurance Fund of Saskatchewan Crown Investments Corporation of Saskatchewan (non-consolidated) ^3c Education Infrastructure Financing Corporation Extended Health Care Plan ^3c Extended Health Care Plan for Certain Other Employees ^3c Fiscal Stabilization Fund Fish and Wildlife Development Fund Forest Fire Contingency Fund General Revenue Fund Government House Foundation Health Quality Council Highways Revolving Fund Horned Cattle Fund Individual Cattle Feeder Loan Guarantee Provincial Assurance Fund Information Services Corporation of Saskatchewan ^3c Investment Saskatchewan Inc. ^{2, 3c} Law Reform Commission of Saskatchewan Learning Resources Distribution Centre Revolving Fund Livestock Services Revolving Fund Milk Control Board ^3c Northern Revenue Sharing Trust Account ^3c Oil and Gas Environmental Fund Operator Certification Board Pastures Revolving Fund Prairie Agricultural Machinery Institute Public Employees Benefits Agency Revolving Fund Public Employees Dental Fund ^3c Public Employees Disability Income Fund ^3c Public Employees Group Life Insurance Fund ^3c Queen's Printer Revolving Fund Regional Colleges ^3a Regional Health Authorities Resource Protection and Development Revolving Fund Saskatchewan Agricultural Stabilization Fund Saskatchewan Apprenticeship and Trade Certification Commission ^3a		Saskatchewan Archives Board Saskatchewan Arts Board Saskatchewan Cancer Foundation Saskatchewan Centre of the Arts Fund Saskatchewan Communications Network Corporation Saskatchewan Correspondence School Revolving Fund Saskatchewan Crop Insurance Corporation Saskatchewan Development Fund Corporation ^3c Saskatchewan Grain Car Corporation ^3b Saskatchewan Health Information Network Saskatchewan Health Research Foundation Saskatchewan Heritage Foundation Saskatchewan Housing Corporation ^3c Saskatchewan Institute of Applied Science and Technology ^3a Saskatchewan Legal Aid Commission Saskatchewan Lotteries Trust Fund For Sport, Culture and Recreation Saskatchewan Opportunities Corporation ^3c Saskatchewan Property Management Corporation Saskatchewan Research Council Saskatchewan Student Aid Fund Saskatchewan Transportation Company ^3c Saskatchewan Water Corporation ^3c Saskatchewan Watershed Authority Saskatchewan Western Development Museum Sask911 Account St. Louis Alcoholism Rehabilitation Centre Training Completions Fund Transportation Partnerships Fund Victims' Fund Water Appeal Board Government Business Enterprises (Modified Equity) Liquor and Gaming Authority Municipal Financing Corporation of Saskatchewan Saskatchewan Auto Fund Saskatchewan Gaming Corporation Saskatchewan Government Growth Fund Management Corporation Saskatchewan Government Insurance Saskatchewan Power Corporation Saskatchewan Telecommunications Holding Corporation SaskEnergy Incorporated Workers' Compensation Board (Saskatchewan)

¹	Organization established during 2003-04.

²	Name changed from CIC Industrial Interests Inc. during 2003-04.

³	The year-ends of certain government service organizations differ from March 31, 2004: a June 2003; b July 2003; and c December 2003.

General Revenue Fund – Details of Debentures
(unaudited)


78		Public Accounts, 2003-04

General Revenue Fund
Public Issue Debentures

As at March 31, 2004

Date of Issue	Date of Maturity	Interest Rate %	Interest Payments	Currency	Purpose of Issue	Amount Outstanding	Total Issue Outstanding	Equity of Applicable Sinking Fund	Sinking Fund Contribution 2003-04
May 10/94	May 10/04	8.82	Semiannual	Can.	GRF	67,116,600	67,116,600	--	--
(The original 4.48% 5,000,000,000 Japanese Yen loan has been swapped into Canadian dollars at an interest rate of 8.82%; Non-callable; Payable in Tokyo)
June 22/99	June 17/04	5.50-5.75	Semiannual	Can.	SOCO	25,000,000	25,000,000	--	--
(Canadian medium term note; If not redeemed by the holder on June 17, 2004, this note matures on June 17, 2019; This note pays interest of 5.50% to June 17, 2004 and 5.75% thereafter; This book-based note is held in the Canadian Depository for Securities)
July 15/99	July 15/04	5.00	Annual	Can.	GRF	138,642,700	138,642,700	--	--
(Savings Bond; Redeemable annually at the option of the holder or any time on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2000; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)
July 26/94	July 15/04	7.408	Semiannual	Can.	GRF	553,094,588	553,094,588	72,694,526	5,345,200
(The original 8% $400,000,000 U.S. debentures have been swapped into Canadian dollars at an interest rate of 7.405%; Payable in New York)
Aug. 16/94	Aug. 16/04	9.50	Semiannual	Can.	GRF	300,000,000	300,000,000	37,961,957	3,000,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)
Dec. 30/86	Dec. 30/04	9.625	Semiannual	Can.	SaskPower SaskEnergy	89,300,000 10,700,000	100,000,000	--	--
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)
Feb. 17/00	Jan. 25/05	6.10-6.25	Semiannual	Can.	SOCO	25,000,000	25,000,000	1,114,863	250,000
(Canadian medium term note; If not redeemed by the holder on January 25, 2005, this note matures on January 25, 2030; This note pays interest at 6.10% to January 25, 2005 and 6.25% thereafter; This book-based note is held in the Canadian Depository for Securities)
Jan. 16/02	April 1/05	4.205	Semiannual	Can.	GRF	50,000,000	50,000,000	--	--
(Canadian medium term note; The original floating rate debt pays interest at the three month bankers' acceptance rate plus 0.09%. This has been swapped into a fixed rate obligation paying 4.205%; This book based note is held in the Canadian Depository for Securities)
July 15/00	July 15/05	5.75	Annual	Can.	GRF	481,133,900	481,133,900	--	--
(Savings Bond; Redeemable annually at the option of the holder or any time on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2001; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)
Dec. 19/95	Dec. 19/05	7.50	Semiannual	Can.	GRF Sask Water SaskEnergy	218,200,000 6,800,000 75,000,000	300,000,000	31,857,116	3,084,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)


Details of Debentures		79

General Revenue Fund
Public Issue Debentures

Date of Issue	Date of Maturity	Interest Rate %	Interest Payments	Currency	Purpose of Issue	Amount Outstanding	Total Issue Outstanding	Equity of Applicable Sinking Fund	Sinking Fund Contribution 2003-04
March 24/99	March 5/06	5.00-5.60	Semiannual	Can.	SaskTel SaskEnergy	35,000,000 25,000,000	60,000,000	--	--
(Canadian medium term note; If not redeemed by the holder on March 5, 2006, this note matures on March 5, 2029; This note pays interest at 5.00% to March 5, 2006 and 5.60% thereafter; This book- based note is held in the Canadian Depository for Securities)
Oct. 27/00	June 1/06	6.00	Semiannual	Can.	GRF SOCO	240,000,000 10,000,000	250,000,000	--	--
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
July 15/01	July 15/06	4.25	Annual	Can.	GRF	46,860,800	46,860,800	--	--
(Savings Bond; Redeemable annually at the option of the holder or any time on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2002; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)
Aug. 23/96	Aug. 23/06	7.846	Semiannual	Can.	GRF	63,684,000	63,684,000	--	--
(The original 3.451% 5,000,000,000 Japanese Yen loan has been swapped into Canadian dollars at an interest rate of 7.846%; Non-callable; Payable in Tokyo)
Nov. 1/01	Dec. 1/06	4.75	Semiannual	Can.	GRF SOCO ISC	260,000,000 10,000,000 30,000,000	300,000,000	--	--
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
Jan. 25/00	Jan. 25/07	6.35	Semiannual	Can.	GRF	30,000,000	30,000,000	1,337,835	300,000
(Canadian medium term note; Extendible at the option of the holder to January 25, 2030; This book-based note is held in the Canadian Depository for Securities)
Jan. 25/00	Jan. 25/07	5.49-6.35	Semiannual	Can.	GRF	170,000,000	170,000,000	6,972,560	1,700,000
(Canadian medium term note; Extendible at the option of the holder to January 25, 2030; This note pays interest at 6.20% to January 25, 2007, and 6.35% thereafter; $120,000,000 of this note has been swapped into an obligation paying 5.49% to January 25, 2007, and 6.35% thereafter; This book-based note is held in the Canadian Depository for Securities)
March 9/00	March 9/07	6.25	Semiannual	Can.	GRF	250,000,000	250,000,000	--	--
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
May 15/97	May 15/07	6.65	Semiannual	Can.	SaskEnergy	30,000,000	30,000,000	2,237,190	300,000
(Canadian medium term note; Non-callable; This book-based note is held in the Canadian Depository for Securities)
July 15/02	July 15/07	3.25	Annual	Can.	GRF	51,052,100	51,052,100	--	--
(Savings Bond; Redeemable annually at the option of the holder or anytime on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2003; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)


80		Public Accounts, 2003-04

General Revenue Fund
Public Issue Debentures

Date of Issue	Date of Maturity	Interest Rate %	Interest Payments	Currency	Purpose of Issue	Amount Outstanding	Total Issue Outstanding	Equity of Applicable Sinking Fund	Sinking Fund Contribution 2003-04
Jan. 31/02	Sept. 6/07	5.00	Semiannual	Can.	GRF	400,000,000	400,000,000	--	--
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
March 2/83	March 1/08	9.00	Annual	Can.	SaskEnergy	50,000,000	50,000,000	--	--
(Non-callable; Payable in London and Toronto)
March 15/93	March 15/08	7.125	Semiannual	U.S,	SaskPower	194,000,000	194,000,000*	33,593,441*	2,597,854**
(Non-callable; Payable in New York)
Nov. 28/97	May 28/08	5.50	Semiannual	Can.	SOCO	20,000,000	20,000,000	1,491,460	200,000
(Canadian medium term note; Non-callable; This book-based note is held in the Canadian Depository for Securities)
Feb. 26/98	June 2/08	5.50	Semiannual	Can.	GRF SOCO SaskEnergy Sask Housing	328,500,000 40,000,000 25,000,000 6,500,000	400,000,000	23,818,026	4,000,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
July 15/03	July 15/08	3.00	Annual	Can.	GRF	134,182,100	134,182,100	--	--
(Savings Bond; Redeemable annually at the option of the holder or any time on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2004; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)
Sept. 24/03	Sept. 5/08	3.90-5.75	Semiannual	Can.	Sask Crop	50,000,000	50,000,000	--	--
(Canadian medium term note; Extendible at the option of the holder to September 5, 2033; This note pays interest at 3.90% to September 5, 2008, and 5.75% thereafter; This book-based note is held in the Canadian Depository for Securities)
Feb. 13/02	Feb. 13/09	5.05-6.30	Semiannual	Can.	Sask Housing SPMC	24,500,000 5,500,000	30,000,000	1,409,309	673,750
(Canadian medium term note; Extendible at the option of the holder to February 13, 2032; This note pays interest at 5.05% to February 13, 2009, and 6.30% thereafter; This book-based note is held in the Canadian Depository for Securities)
Sept. 24/02	Sept. 24/09	4.75	Annual	Can.	GRF Sask Crop Sask Water	195,500,000 50,000,000 4,500,000	250,000,000	--	--
(Euro medium term note; Non-callable; Payable in London)
Nov. 12/99	Nov. 12/09	6.50	Semiannual	Can.	GRF	250,000,000	250,000,000	11,259,156	2,500,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
Jan. 18/90	Jan. 18/10	10.00	Semiannual	Can.	GRF	300,000,000	300,000,000	74,710,170	3,000,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)


Details of Debentures		81

General Revenue Fund
Public Issue Debentures

Date of Issue	Date of Maturity	Interest Rate %	Interest Payments	Currency	Purpose of Issue	Amount Outstanding	Total Issue Outstanding	Equity of Applicable Sinking Fund	Sinking Fund Contribution 2003-04
Sept. 1/00	Sept. 1/10	6.15	Semiannual	Can.	GRF SaskTel SaskEnergy	380,000,000 90,000,000 80,000,000	550,000,000	18,217,411	5,500,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
March 1/01	March 1/11	6.80	Semiannual	Can.	GRF	50,000,000	50,000,000	1,606,849	500,000
(Canadian medium term note; Non-callable; This book-based note is held in the Canadian Depository for Securities)
June 10/03	Sept. 5/11	4.75-5.80	Semiannual	Can.	GRF	50,000,000	50,000,000	--	--
(Canadian medium term note; Extendible at the option of the holder to September 5, 2033; This note pays interest at 4.75% to September 5, 2011, and 5.80% thereafter; This book-based note is held in the Canadian Depository for Securities)
Sept. 20/02	Dec. 3/12	5.25	Semiannual	Can.	GRF SaskEnergy	300,000,000 50,000,000	350,000,000	3,616,060	3,500,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
Feb. 2/93	Feb. 1/13	7.402 8.00	Semiannual	Can. U.S.	GRF GRF	362,478,760 149,000,000*	511,478,760	26,410,233 49,461,602*	5,353,600
($251,000,000 U.S. of the original 8% $400,000,000 U.S. debentures have been swapped into Canadian dollars at an interest rate of 7.402%; Non-callable; Payable in New York)
June 17/03	June 17/13	4.75	Annual	Can.	GRF MFC	195,000,000 5,000,000	200,000,000	--	--
(Euro medium term note; Non-callable; Payable in London)
July 20/93	July 15/13	7.677 7.375 7.375	Semiannual	Can. U.S. U.S.	GRF GRF SaskPower	173,469,500 95,000,000* 75,000,000*	343,469,500*	46,951,069*	4,368,349**
($130,000,000 U.S. of the GRF's $225,000,000 U.S. share of the 7.375% debenture issue has been swapped into Canadian dollars at an interest rate of 7.677%. Of the remaining $95,000,000 U.S., interest payments on $50,000,000 U.S. have been swapped into Canadian dollars at an interest rate of 7.912%; Non-callable; Payable in New York)
Sept. 30/03	Dec. 3/13	4.90	Semiannual	Can.	GRF	200,000,000	200,000,000	--	--
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
March 14/91	April 10/14	10.25	Semiannual	Can.	GRF	583,916,000	583,916,000	118,913,362	5,839,160
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)
Dec. 1/65	Dec. 1/15	5.125	Semiannual	Can.	GRF U. of S.	1,060,321 296,694	1,357,015	--	--
(Payable in blended semi-annual payments of principal and interest totalling $76,399.60; Payable in whole or in part any time prior to December 1, 2015, without penalty; Payable in Ottawa)


82		Public Accounts, 2003-04

General Revenue Fund
Public Issue Debentures

Date of Issue	Date of Maturity	Interest Rate %	Interest Payments	Currency	Purpose of Issue	Amount Outstanding	Total Issue Outstanding	Equity of Applicable Sinking Fund	Sinking Fund Contribution 2003-04
Sept. 17/96	Sept. 17/16	7.93	Semiannual	Can.	Sask Water	15,801,000	15,801,000	--	--
(Canadian medium term serial note; Payable in annual instalments; Non-callable; Payable in Regina)
Dec. 20/90	Dec. 15/20	9.375	Semiannual	U.S.	GRF SaskPower Sask Tel	100,000,000 100,000,000 100,000,000	300,000,000*	47,412,200*	4,004,600**
(Non-callable; Payable in New York)
Feb. 26/91	Feb. 15/21	9.125	Semiannual	U.S.	GRF	200,000,000	200,000,000*	43,504,227*	2,601,135**
(Non-callable; Payable in New York)
Feb. 4/92	Feb. 4/22	9.60	Semiannual	Can.	SaskPower Sask Water	240,000,000 15,000,000	255,000,000	45,518,517	2,550,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)
July 21/92	July 15/22	8.50	Semiannual	U.S.	GRF SaskPower	100,000,000 200,000,000	300,000,000*	53,631,942*	4,200,321**
(Non-callable; Payable in New York)
May 30/95	May 30/25	8.75	Semiannual	Can.	SaskPower SaskEnergy	100,000,000 75,000,000	175,000,000	19,117,985	1,750,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of Canada)
Dec. 4/98	March 5/29	5.75	Semiannual	Can.	GRF SaskTel SaskEnergy	250,000,000 75,000,000 25,000,000	350,000,000	16,724,180	3,500,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
Dec. 10/01	Sept. 5/31	6.40	Semiannual	Can.	GRF SaskPower SaskEnergy	190,000,000 300,000,000 60,000,000	550,000,000	10,708,392	5,500,000
(Non-callable; This book-based note is held in the Canadian Depository for Securities)
May 12/03	Sept. 5/33	5.80	Semiannual	Can.	GRF SaskPower	150,000,000 300,000,000	450,000,000	--	--
$250,000,000 of debentures were issued on May 12, 2003; This issue was reopened on January 14, 2004 and an additional $200,000,000 of debentures were sold; Non-callable; This book-based note is held in the Canadian Depository for Securities)
Sept. 16/02	Sept. 5/42	5.70	Semiannual	Can.	GRF	50,000,000	50,000,000	523,437	500,000
(Canadian medium term note; Non-callable; This book-based note is held in the Canadian Depository for Securities)
* Adjustment to reflect conversion of debentures and related sinking funds quoted in foreign currencies to Canadian dollars using the exchange rate in effect at March 31, 2004 (U.S.$1.3105)							419,032,740	85,249,166	--
Total							$11,274,821,803	$888,024,241	$76,617,969

Sinking fund contributions to U.S. dollar sinking funds are made in U.S. dollars. Contributions for general government purposes are shown at the cost in Canadian dollars to purchase U.S. dollars equal to the contribution amount. Contributions for Crown corporation purposes are converted to Canadian dollars at the U.S./Canadian exchange rate at the date the contribution was made.


Details of Debentures		83

General Revenue Fund
Debentures Issued to the Minister of Finance of Canada

As at March 31, 2004

Date of Issue				Amount Outstanding
Canada Pension Plan Investment Fund*
April 1984 - March 1985	April 2004 - March 2005		13.37		104,274,000
April 1985 - March 1986	April 2005 - March 2006		11.48		112,507,000
April 1986 - March 1987	April 2006 - March 2007		9.61		133,709,000
April 1987 - March 1988	April 2007 - March 2008		9.61		88,333,000
April 1988 - March 1989	April 2008 - March 2009		10.08		93,932,000
April 1989 - March 1990	April 2009 - March 2010	**	9.90		101,867,000
April 1990 - March 1991	April 2010 - March 2011	**	10.85		90,318,000
April 1991 - March 1992	April 2011 - March 2012	**	9.92		90,664,000
April 1992 - March 1993	April 2012 - March 2013	**	9.37		62,705,000
April 1999 - March 2000	April 2019 - March 2020	**	6.34		46,335,000
April 2000 - March 2001	April 2020 - March 2021	**	6.54		75,553,000
April 2002 - March 2003	April 2022 - March 2023	**	5.89		41,182,000
April 2003 - March 2004	April 2023 - March 2024	**	5.48		40,189,000
					1,081,568,000
The Municipal Development Loan Fund
1965 - 1967	2005 - 2007		5.38		9,785

Total				$	1,081,577,785

The average effective interest rate on debentures issued to the Minister of Finance of Canada is 9.70%.

*	Canada Pension Debentures have a 20 year maturity. These debentures are callable in whole or in part before maturity, on 30 days prior notice at the option of the Minister of Finance of Saskatchewan.

**	Subject in part to annual sinking funds; equity in sinking funds at March 31, 2004, $59,510,924.

This page left blank intentionally.

Glossary of Terms

This page left blank intentionally.


Glossary of Terms		87

Glossary of Terms

Accrual Accounting

The method used to prepare the financial statements included in Volume 1 of the Public Accounts. Accrual accounting recognizes financial transactions at the time they occur, regardless of whether any cash is received or paid.

Accumulated Deficit

The amount by which expenditures have exceeded revenues from the beginning of incorporation (1905). It is the sum of all annual deficits and surpluses plus any adjustments that were charged directly to the accumulated deficit.

Budget

The amount presented in the Estimates and authorized by the Legislative Assembly.

Consolidation

The method used to account for government service organizations in the Summary financial statements in which the accounts are adjusted to the basis of accounting described in note 1c of the Summary financial statements and then combined. Inter-organization balances and transactions are eliminated.

Debt

Terms used when describing debt include:

Guaranteed debt is the debt of others that the Government has agreed to repay if others default.

Sinking funds are funds set aside for the repayment of debt.

Debt (as reported in the General Revenue Fund financial statements) is the debt issued for general government purposes and Crown corporations, net of sinking funds.

Total debt (as reported in the General Revenue Fund financial statements) is the debt issued for general government purposes and Crown corporations, net of sinking funds, plus guaranteed debt.

Public debt (as reported in the Summary financial statements) is the debt of government service organizations, net of sinking funds.

Total public debt (as reported in the Summary financial statements) is the debt of government service organizations and government business enterprises, net of sinking funds.

Debt Reduction Account

The account, established pursuant to The Balanced Budget Act, to account for the accumulated surpluses of the General Revenue Fund commencing April 1, 1995.

Fiscal Stabilization Fund (FSF)

The fund established to stabilize the fiscal position of the Government and to facilitate long-term planning. Stabilization occurs through transfers between the FSF and the General Revenue Fund.

General Revenue Fund

The fund into which all revenues are paid, unless otherwise provided for by Legislation, and from which all expenditures are appropriated by the Legislative Assembly.

Government Business Enterprises

Self-sufficient government organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the reporting entity as their principal activity. Government business enterprises are recorded in the Summary financial statements using the modified equity method.

Government Business Partnerships

Investments by the Government where there is a contractual arrangement between the Government and one or more partners outside the reporting entity and where the partners share, on an equitable basis, the risks and benefits of the partnership. These partnerships are self-sufficient and have the financial and operating authority to sell goods and services to individuals and organizations outside the reporting entity as their principal activity. Government business partnerships are accounted for in the Summary financial statements using the modified equity method.


88		Public Accounts, 2003-04

Government Service Organizations

Those organizations that are accountable to the Government and either owned or controlled by the Government, except those designated as government business enterprises. Government service organizations are consolidated in the Summary financial statements after adjustment to a basis consistent with the accounting policies described in note 1c of the Summary financial statements.

Modified Equity

The method by which government business enterprises and government business partnerships are accounted for in the Summary financial statements. The Government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings/losses and other net equity changes of the enterprise/partnership without adjustment to conform with the accounting policies described in note 1c of the Summary financial statements. Inter-organizational balances and transactions are disclosed but not eliminated.

Pension Liability

An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Summary Financial Statements (SFS)

The statements prepared to account for the full nature and extent of the financial activities of the Government. The SFS reporting entity includes the financial activities of organizations which are accountable for the administration of their financial affairs and resources either to a Minister of the Government or directly to the Legislative Assembly and which are owned or controlled by the Government. Trusts administered by the Government are excluded from the reporting entity.

Saskatchewan Province Of 18-KAnnual report (foreign governments)

Introduction to the Public Accounts

Internet Address

Sources of Additional Information

Financial Statements Compendium

Annual Reports of Saskatchewan Crown Corporations

Budget Address

Saskatchewan Estimates

Province of Saskatchewan Interim Financial Reports

General Revenue FundFinancial Statements

Responsibility for General Revenue Fund Financial Statements

Auditor’s Report

Reservations

Opinion

1. Significant Accounting Policies

a) Reporting entity

b) Basis of accounting

Revenue

Expenditure

Assets

Liabilities

2. Measurement Uncertainty

3. Cash and Temporary Investments

4. Agricultural Land Held For Resale

5. Tangible Capital Assets

6. Risk Management of Public Debt

7. Retirement Benefits

Defined benefit pension plans

Defined contribution plans

Pension expenditure

8. Reserves

9. Debt Servicing Costs

10. Operating Expenditure by Function and by Object

11. Contingencies

Guaranteed debt

Lawsuits

Indian and Northern Affairs Canada

Crop Insurance Liability

12. Commitments

13. Related Party Transactions

14. Trust Funds

15. Comparative Figures

16. Debt Reduction Account

17. Adjustment to Accumulated Deficit

Schedule 1 - Accounts Receivable

Schedule 2 - Loans to Crown Corporations

Schedule 3 - Other Loans

Schedule 4 - Accounts Payable and Accrued Liabilities

Schedule 5 - Deposits Held

Schedule 6 - Debt

Schedule 7 - Sinking Funds

Schedule 8 - Debt by Maturity

Schedule 9 - Guaranteed Debt

Schedule 9 (continued) - Guaranteed Debt

Scotiabank

Luscar Ltd.

Breeder and Feeder Associations

Saskferco Products Inc.

NewGrade Energy Inc. (NewGrade)

Schedule 10 - Revenue

Schedule 11 - Loss on Loans and Investments

Schedule 12 - Net Change in Non-cash Operating Activities

Schedule 13 - Investing Activities

Fiscal Stabilization Fund(unaudited)

Summary Financial Statements

1. Significant Accounting Policies

a) Reporting entity

b) Method of consolidation

c) Basis of accounting

Revenue

Expenditure

Assets

Liabilities

2. Cash and Temporary Investments

3. Land Held for Resale

4. Tangible Capital Assets

5. Measurement Uncertainty

6. Risk Management of Public Debt

7. Retirement Benefits

a) Pension Liabilities

General Revenue Fund
Financial Statements

Fiscal Stabilization Fund
(unaudited)

General Revenue Fund – Details of Debentures
(unaudited)